TaxTMI 
TaxTMI 
2018 (11) TMI 206
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....he assessee. The ld AO treated the same as business income but the ld CIT(A) held it to be capital gain. 2. Brief facts of the case shows that the assessee is an individual who filed his return of income on 26.09.2011 declaring income of Rs. 9591980/-. He is engaged in the business of trading in securities, derivatives and professional income. He also derived salary. The assessee has also shown capital gain. 3. During the year the assessee has shown capital gain of Rs. 26953746/- arising out of the sale of mutual funds in one AMC in four different schemes. The holding period of the mutual funds were from 72 days to 186 days. The ld AO noted the Circular No. 74/2007 dated 15.06.2007 and held that the assessee is engaged in the business....
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....er in coming to the conclusion that the capital gains amounting to Rs. 2,69,53,746/- was business income observed in para 4.3.5 (ii) that the period of holding the investment varied from as short as few days to few months and in most of the cases, the period of holding was less than one month. However, on perusal of the holding period as submitted in Annexure-8 of the written submission filed in the appellate proceedings, it is seen that out of total capital gains investments in Kotak India Real Estate Fund-1, DWS fix term fund series 43 regular growth and Birla Sun Life dynamic bond fund-Regular Income-Monthly Dividend are long term investments and held between FY 2006-07 to 2009-10 and constitutes over 76% of the capital gains at book val....
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....71/- 185 days 3. DSP Black Rock Equity Fund 15.03.2010 5,00,000/- 17.09.2010 5,29,841/- 29,841/- 186 days 4. DSP Black Rock Focus 25-Fund 10.06.2010 1,00,00,000/- 15.09.2010 1,11,08,000/- 11,08,000/- 97 days 3.9 Even though, the submission of the Assessing Officer is correct that the above assets were purchased and sold during the same year but it is to be noted that the assets at serial no. 2 & 3 were purchased and sold in two different financial years and in all the transactions, the period of holding is not as short as few days but varies between 72 days to 97 days and it does not show the intent of the appellant to do business in the above mutual funds but to earn appreciation ....
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....utual funds as capital assets. Further, the department has consistently accepted the capital gains shown in respect of mutual funds in the assessment order u/s 143(3) for AY2004-05. The appellant had declared capital loss amounting to Rs. 40,13,539/- in respect of similar mutual fund transactions in AY 2013-14, which has also been accepted as capital loss in order u/s. 143(3) dt. 18.03.2016. 3.11 Therefore, in view of the above discussion, it is held that the appellant has right considered the capital gains in respect of the mutual funds as shown in annexure-8 as discussed above in his computation of income and the same is in harmony with circular no. 4/2007 dt. 15.06.2007. Further, the same is also acceptable by applying the princ....