Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 203 - AT - Income TaxNature of Income - CIT(A) treated the income as income earned from investment in STCG for the A.Y. 2006-07 reversing the order by the AO u/s. 143(3) of the Income Tax Act, 1961 treating the same income as business income – Held that:- The appeal of the Department was allowed, and the AO was directed to treat the impugned income in question as earned through transactions made directly through ICICI Online as business income and assess the assessee accordingly - Assesse was engaged in business and not in investment - It was not the number of transactions per scrip alone that is relevant - The number and volume of scrips; the number of transactions; and the intention of assessee as demonstrated by the conduct, that were also the relevant factors - it was clearly revealed that the conduct of assessee was not that of an investor; rather, it showed that she was engaged in business of purchasing and selling shares - The number of transactions; the whole time engagement of assessee in making transactions according to the ups and down of the market to reduce the loss and make profit are the relevant factors which shows that assessee has been engaged in business/vocation and not as an ‘investor’, so far the assessment year in question is concerned. Not only a large number of transactions have been made directly through the ICICI Online, but the assessee has also made voluminous transactions through PMS - These transactions of purchase and sale have been made continuously and regularly throughout the year without any interval, showing that assessee was keeping a constant vigil on the ups and downs of the market, and purchasing and/or selling the shares accordingly - This type of conduct, it may be appreciated, cannot be said to be that of an investor; rather, has the characteristics of a business - The word “business” is a word of large and indefinite import - it is something which occupies the attention and labour of a person for the purpose of profit - it is an activity carried on continuously in an organized manner with a set purpose and with a view to earn profit - these attributes were present in the instant case. M.M. Nissim & Co. Versus Assistant Commissioner of Income-tax 11(3) [2007 (9) TMI 437 - ITAT MUMBAI] - The entirety of the transactions and the overall conduct of the assessee was to be taken, so that the same, being backed by delivery, were also considered as so, i.e., leading to STCG, and not business income, as claimed by the Revenue. The assessee’s case was not a case of a solitary transaction; rather, the sole motive of the assessee in making regular transactions of purchase and sale of shares is to earn profit by selling them at a higher rate - What the assessee in the case at hand was doing was a business of sale and purchase of shares as commodity, taking conscious decisions all the time to either buy, hold or sell a scrip by keeping a constant vigil on the market as also the developments in the economy as well as in relation to the shares held or to be held - Decided in favour of Revenue.
|