TaxTMI 
TaxTMI 
2018 (3) TMI 1156
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....ying on the business of trading in shares and deriving rental income, filed her return of income on 30.07.2008 declaring total income of Rs. 4,34,76,040. The assessment was completed u/s 143(3) on 13.12.2010 by treating the income of Rs. 4,34,76,040 earned from purchase and sale of shares as "business income" as against "Short Term Capital Gain" declared by the assessee. The issue was carried up to the ITAT and the Tribunal had restored the matter to the file of the AO with a direction to re-examine the issue. 3. Consequently, the AO issued notices u/s 143(2) and 142(1) of the Act to the assessee asking the assessee to furnish full and complete facts and the details and evidence in the light of the directions of the Tribunal with respect....
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....ssee to verify the recording of such transactions in the books of account of the assessee and noticed that the share account is recorded as "profit (loss) on sale of shares" which after various debits (losses) and credits (profits), records a net profit of Rs. 4,34,79,816 in the shares account. He also observed from the books of account that the assessee has borrowed interest free loans from M/s. Inani Commodities & Finance Ltd amounting to Rs. 1.90 crores as on 9.4.2007, which was in turn given to M/s. Inani Securities Ltd for purchase and sale of shares during the year and that the assessee has not only returned the loan amount on 20.11.2017 but also deposited Rs. 3.80 crores with the said company as on 20.11.2007 and therefore, the asses....
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.... investments are valued at cost and not at cost on market value whichever is higher is required for valuation of the stock-in-trade as per Accounting Standard-13. It is also submitted that all the transactions of the purchase of shares are delivery based and that the frequency of the transaction cannot be the only basis for determining the nature of the transaction and that it has to be determined on the totality of the facts and circumstances of the case. Without prejudice to the above contentions, it was also submitted that only in the case of 11 transactions where the shares were purchased and sold on the same day, the assessee can be considered as a trader and not otherwise. The assessee had relied upon various decisions including the d....
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....Coordinate Bench of the Tribunal at Mumbai had held that the assessee can have both the portfolios of investments as well as trading and the frequency of the transactions alone will not determine the nature of the transactions to be trading. This decision has been upheld by the Hon'ble Bombay High Court as well as the Hon'ble Supreme Court of India. In fact, the Tribunal in the assessee's own case had also referred the matter back to the AO with a direction to consider the multiple parameters such as intention, profit motive, the turnover, volume, magnitude, frequency, source of funds-own or borrowed, day-trading delivery based or otherwise etc. for concluding whether the transactions were for investment or trading. The assessee had....
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....n short term capital gains to the extent of Rs. 35,35,263/- under the head "Income from Capital Gain" and sub-head "Shortterm Capital Gain". However, when pointed out about the transactions of F & O, the assessee admitted that the amount of Rs. 5,97,412/- can be considered as business, as there is no delivery of the shares. It was further pointed out that 24,900 shares of Cybermedia were purchased and sold on the same day. The learned Counsel also admitted to that extent that this was also can be treated as business. Hence, capital gain of Rs. 3,75,107/- also has be treated as business income. Considering these facts, we are of the opinion that rest of the transactions also do come in trading transactions. There can not a situation where pa....