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2013 (7) TMI 474 - AT - Income TaxSale of shares - short term capital gain v/s income from business - Held that:- There are 86 transactions of sale carried by the assessee during the year. The holding period of the transactions varies from one day to 244 days. Out of 86 transactions, the holding period in respect of 42 transactions is upto 7 days. Thus, it is clear that about 50% of the total transactions of sale of share during the year, the holding period is only upto 7 days. The repetitive transactions in the same scrip shows the assessee’s intention of purchase of the shares for resale purposes and book profits at the earliest occasion. The holding period is upto one week as far as 42 transactions out of 86 transactions clearly show that the assessee is earning profit by taking advantage of the volatile market condition and thus it cannot be said that the transactions carried on 42 occasion were with the intention to hold these shares for enjoying of the ownership and yielding of dividend income. Further, the assessee is also engaged in the speculative transactions as business income on account of speculative transactions out of the total business income offered by the assessee at ₹ 9,52,507/-. Therefore, the observations of the CIT(A) is that the assessee is not in the business of trading of shares is contradictory to the facts. Further, the CIT(A) has also observed that the assessee has not employed any person for the purchase of sale of the shares which is also apparently not correct because before the AO one Shri Jayesh Sangoi, Accountant of the assessee company appeared from time to time and participated in the assessment proceedings. Following the decision of New Jehangir Vakil Mills Co. Ltd. v. CIT (1963 (4) TMI 60 - SUPREME COURT) the acceptance of the claim for the earlier year would not operate resjudicata or estoppel on the Assessing Officer for deciding the issue for the year under consideration when the facts are not strictly identical. Accordingly set aside the impugned order of the CIT(A) and restore the order of the AO wherein the income arising from sale of shares has been rightly assessed as business income. Claim of LTCG and STCG - Held that:- There is no such category of 30 days provided in the provisions of Income Tax Act. Even otherwise, when the assessee has not bifurcated its portfolios on the basis of holding period, then 30 days holding period cannot be taken as fixed criteria for determining the nature of transaction when the question of nature of transaction can be determined after taking into consideration various factors and criterias and the holding period is one of the several criterias. Therefore no approval to the action of the authorities below in bifurcating the transactions on the basis of 30 days holding period; however, since the claim of the assessee in respect of STCG has been accepted by the Assessing Officer, which has been confirmed by the CIT(A) remains undisturbed, despite the nature of transaction as trading and not as investment. Against assessee.
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