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2013 (9) TMI 448 - AT - Income TaxBusiness income or capital gain - Sale and purchase of shares - Held that:- Assessee picked up the six common scrips for business of F&O as well as the STCG. This is the area of dispute between the parties and there is no issue on change of classification of STCG as LTCG or vice versa before us. There is no clarity on what basis certain transactions involving the same scrip are treated as business and others as STCG and the assessee has no explanation in this regard except relying on the book entries, which we rejected already for detailed reasons given above. In the process, the assessee got an unfair advantage of lower tax rates applicable to the STCG. Such advantage is allowable unless the onus cast on the assessee is demonstrated. Assessee could not demonstrate the reasons for such treatment, which turned out to be prejudicial to the interest of the revenue. Considering the failure of the assessee, we are of the opinion the decision of the AO becomes sustainable. Quick realization of the profits - Held that:- Assessee maintains uniformly the closing stock worth Rs 17- Rs 18 lakhs in all recent AYs. The same is case with opening stocks of shares too. In fact, the opening and closing values are more or less equal. The number of scrips, transactions of purchase and sales also suggests the increasing trends for making quick business profits. Thus, the decision of the Tribunal in the case of Mukeshbhai Babulal Shah (2013 (9) TMI 151 - ITAT RAJKOT) which is relevant for the proposition that “where intention of the assessee behind purchase and sales of the shares was quickly to realize profits and not to earn dividend from them, the income would be assessable as business income”, helps the revenue. The intention of acquiring the shares as investment for capital appreciation is not translated and instead the symptoms of going for quick profits are evident. The stock: turnover ratio at 1:16 does against the claims of the assessee. Other data relating to opening stocks and closing stocks on one side and the assessee’s final exiting from the so called claim of STCG at the end of 2011-12 indicates the assessee’s conduct for quick profits and not for investment. Of course, the holding period particulars also confirm the AO’s conclusions. - Decided in favour of Revenue.
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