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2010 (6) TMI 510 - ITAT, MUMBAIBusiness income or capital gain - The dispute is regarding nature of income from share transactions in delivery based shares entered into by the assessee during the year - In addition to the business as share broker from which the assessee has received brokerage income, the assessee has also been undertaking transactions in shares in his proprietary capacity - The true nature of transaction can be understood from the intention of the assessee at the time of purchase - Though frequency and volume are indicative of a trading transaction, the same are not conclusive - No shares sold have been held for more than one year as the entire capital gain has been shown as short term capital gain - Thus the assessee has been selling the share on average profit of about .5% which can happen only in a trading transaction and not in investments It has also been argued that the assessee had received increased dividend of Rs.94,31,290/- compared to Rs.44,51,213/- in the immediate preceding year which shows that the assessee was making investment in shares from this year - The dividend is an incidental income even in trading transaction because the assessee will receive dividend in case of purchases made before the record date even if the purchases are held for a short period - In this case considering the assessee had made purchases worth about Rs.3500 crores the dividend is negligible and is only an incidental income relating to the trading activity It is true but in order to hold that the assessee remained an investor it has to be shown from the circumstances of the case that the assessee was not purchasing and selling as a trader to make profit - It was held that the dominant object for acquiring right shares and renouncing of some shares and selling of some new shares was to prevent eroding the value of capital as after the right issue the value of original shares was bound to depreciate - Accordingly decided in the favour of the assessee as a trader Regarding depreciation on membership card of BSE - the issue raised is covered against the assessee by the judgment of Hon'ble High Court of Mumbai in case of Techno shares and Stock Ltd. (2009 -TMI - 34562 - BOMBAY HIGH COURT). The assessee in that case had claimed that BSE card was an intangible asset and therefore depreciation was allowable in view of the provision of section 32(l)(ii) as per which depreciation was allowable in respect of intangible assets from 1.4.1998 Regarding interest paid on arrear of SEBI turnover fees - where a particular percentage of turnover is charged as turnover charge, the latter was of the nature of tax, duty, cess or fees which come within the purview of section 43B - Accordingly decided in the favour of the assessee
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