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2014 (5) TMI 997 - ITAT DELHISale/purchase of shares under the head capital gains - Held that:- Primarily the intention of assessee is of paramount importance in determining whether the shares were held by it as investment or as stock in trade - All the attendant circumstances have to be taken into consideration to find out the true intention of assessee - there is no dispute that in earlier years the assessee had treated all share holdings as its investment and never traded in shares - the intention of assessee in acquiring shares was always as investor and not as trader - In the current assessment year also the shares were acquired in respect of one company only but the number of shares was considerable due to which brokers note were running into several pages which probably triggered the entire controversy and in culminating into the observations of AO that assessee had entered into hundreds of transaction on day to day basis. The assessee has clearly demonstrated that the observations were not correct and nothing has been brought on record by the Department to controvert the finding of the CIT(A) - The magnitude of transaction does not alter the nature of transaction that does not decide the intention of assessee - The total number of purchase transactions were only six and the sale transactions were only eight - By no stretch of reasoning, this frequency can be said to be very frequent so as to lead to the conclusion that assessee was trading in shares. Merely because the assessment of speculation profit is as per the provision contained u/s 43(5) would not lead to ipso facto conclusion that assessee’s intention was to trade in shares - Mere assessment under a particular head of income is no criteria for determining the overall intention of assessee - An investor also can enter into speculative transactions as there is no prohibition under the Act - Only the income is to be assessed as business income - this aspect cannot form the basis for deciding the intention of assessee in respect of those shares where assessee has taken delivery of shares and then sold them within a short gap of time – there is no reason to interfere with the order of CIT(A) – Decided against Revenue.
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