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2013 (11) TMI 191 - ITAT MUMBAIBusiness Income - Whether gains shown by the assessee under the short term capital gains can be treated under the head “Business Income” – Held that:- There was no reason to interfere with the order of the learned CIT(A) in holding the gains arising from sale and purchase of shares as capital gain - It was also to be noted that the AO treated only short term capital gains as business income where as long term capital gains on the same portfolio was accepted as such - The case clearly demonstrated that the intention of the assessee to hold the shares as investment and not stock in trade - The motive of the transaction of sale and purchase was not to realize the profit at the earliest possible occasion but to retain share for appreciation of the value - It was evident from the fact that the unrealized gain in respect of shares which were held by the assessee at the end of the financial year was more than the capital gain offered by the assessee - If the motive of the assessee was to realize the profit in the volatile conditions of the market, then the assessee would have sold the shares instead of retaining the same at the end of the year. No benefit of reduction in value of stock and payment of STT was obtained by the assessee in any of the years indicate that the assessee was only an investor and not a trader - The reason for offering the five transactions as business income was also properly explained as punching errors by broker and sale during non-delivery period of stock exchange which have been considered as speculative in nature. The transactions cannot be treated differently in the year under consideration - Even otherwise, if the investment in the earlier year is treated as stock in trade in this year then in view of the provisions of section 45(2), the difference in the market price and the cost as shown in the books of account would be treated as capital gain.
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