2013 (1) TMI 1059

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....om Other Sources". The assessee had shown income under the head "Short Term Capital Gains" at ` 14,41,279, "Income From Long Term Capital Gains" at ` 12,10,89,291, and "Income From Other Sources" ` 17,571, which do not include dividend income of ` 62,46,014, which has been claimed as exempt under section 10(34). Besides this, the assessee has shown business loss of ` (-)3,18,433. The assessee is regularly trading in shares and the capital accounts of the assessee revealed that all the receipts of the assessee are mainly on account of transactions in shares and securities. In the computation of income, the assessee has bifurcated these credit entries and offered the profit & loss on sale of shares as "Short Term Capital Gains" or "Long Term Capital Gains" and business income separately. In view of the regularity, volume, turnover, period of holding of the shares and the value of the transactions in shares, the Assessing Officer formed an opinion that income under the heads "Short Term Capital Gains" and "Long Term Capital Gains" shown by the assessee falls into the category of "Business Income". He further noted that the transactions of shares shown under "Long Term Capital Gains" a....

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....35 Total   34 1,50,94,145 100 1,38,44,379 12,49,767 100 5. The Commissioner (Appeals) accepted the assessee's contentions following the judgment of Gopal Purohit (supra), earlier decision of the Commissioner (Appeals) and the assessment order of the earlier years rendered in the case of the assessee. On merits, also, he held that income from sale of shares shown by the assessee under the heads "Long Term Capital Gains" and "Short Term Capital Gains" has to be accepted as per the reasoning given from Pages-11 to 15, of the appellate order and the Assessing Officer's action for treating the same as "Business Income" was accordingly reversed. 6. Before us, the learned Departmental Representative relying on the detail findings given by the Assessing Officer submitted that the findings given in the earlier years cannot be held to be res-judicata in this year, as each year is independent. The Assessing Officer has brought on record sufficiently that the assessee has been dealing in shares regularly and has undertaken several transactions specifically those shown under the head "Short Term Capital Gains". Thus, the income shown by the assessee in relatio....

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....thorities. We have also have the benefit of the decisions of the Tribunal in assessee's own case in assessment year 2005-06 vide ITA No. 534/Mum/2004 and for A.Y. 2006-07 vide ITA No. 882/Mum/2010. On perusal of the statement of Long Term Capital Gain exhibited at page-3 of the Paper book, we find that the assessee has done following transactions: A.Y. 2006-07 U/s. 143(3) S. No. Holding period Long Term Gain (Rs.) Nos. of Scripts 1 1-2 years 28,58,473/- 2 2.  2-5 years 1,45,59,782/- 21 3.  5-10 years 99,95,801/-  27 4.  10 or more 1,67,123/-  10   Total 2,75,81,179 60 A.Y. 2005-06 U/s. 143(3) S. No. Holding period Long Term Gain (Rs.) Nos. of Scripts 1 1-2 years 35,20,327/-  11 2.  2-5 years 35,24,418/- 14 3.  5-10 years 84,79,577/- 24 4.  10 or more 4,99,450/- 7    Total 1,60,23,772/- 56 As compared to the above figures for the year under consideration, the assessee has done the following transactions:  A.Y. 2008-09 U/s. 143(3) S. No. ....

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....ing in view of the number of transactions giving rise to the earning short term capital gain and number of scripts as well as the amount of investment, the transactions of sale and purchase of shares giving rise to short term capital gain cannot be treated as trading in shares and consequently business income when the assessee is maintaining the separate portfolio. The case of the assessee is also covered by various decisions as relied upon by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) and allow the appeal of the assessee. 11. Similarly for the assessment year 2006-07, the Tribunal in ITA No. 882/M/2010 (supra) has held as follows: "We have perused the records and considered the rival contentions carefully. The dispute is regarding the nature of income from sale and purchase of shares by the assessee. The issue, whether the income from sale and purchase of shares in a particular case should be treated as capital gain or as business income has been a debatable issue and there are conflicting decisions of the Tribunal on this issue. Each case is, therefore, to be based on its own factual situation. In the present case, the assessee had held the ma....