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2011 (4) TMI 19 - AT - Income TaxCapital Gain or business income - sale purchase in bulk volume - Held that: - the assessee is only an investor and has not undertaken the investment in the stock market as a business venture. He is an informed individual being an economist earlier teaching the subject in a college and after leaving that job he has taken to religious preaching and investing in stock market for gains with his knowledge. One could see that he is a good timer of purchase and sale of shares whereby substantially increasing his gains in the stock market. One of the reasons taken by the A.O. was about large turnover. The reason for large turnover is because of bulk purchases and sales in a scrip. There are very few transactions of purchase and sale, as the assessee is purchasing in block of a particular share in large volume. - Considering the fact that assessee is not a broker or sub-broker and also not having any office establishment and also on the fact that all the shares as available on 01.04.2005 were sold mostly by the end of May and few shares at the end of September, assessee has intended to be an investor subsequent to the change in the scheme of tax by the Finance Act 2005. On these facts - income to be treated as cpaital gains Reassessment snder Section 147 - Earlier there was only a processing under section 143(1) and no assessment under section 143(3) was done - The reopening was done within 4 years - The A.O. has recorded a reason that assessee was offering the incomes as a trader in earlier years under the head Business whereas in this year offered as short term capital gains - Hence the opinion that there is a reason to believe that income escaped assessment at the time of initiation of proceedings under section 147 - Thus the order of the CIT(A) on this issue is upheld and assessee’s ground on reopening of the issue under section 147 is therefore dismissed.
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