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2017 (3) TMI 1033 - AT - Income TaxIncome from share transaction - business income or capital income - Held that:- As observed that the assessee has undertaken transactions in purchase and sale of shares. The assessee is consistently dealing in shares till assessment year 2001-02 as trader and joined employment with Indusind Bank on 30-05-2010. The assessee has declared itself as investor since 30-05-2010, which stand of the assessee being investor in shares was finally accepted by Revenue either by the AO or by learned CIT(A) while adjudicating first appeal for all these years , except for the impugned assessment year wherein AO and learned CIT(A) have held assessee to be a trader in shares and income was brought to tax as income from ‘Profit and Gains of Business or Profession’. The assessee has not borrowed any funds for making investments in shares which were invested out of own funds. The assessee has also reflected investment in shares as ‘Stock’ in the Balance Sheet filed by the assessee with Revenue and the same is not reflected as opening or closing stock in Profit and loss account as the same was not routed through Profit and Loss Account. The assessee has valued investments in shares in Balance Sheet at ‘Cost’ consistently. Assessee was finally treated as an investor since assessment year 2001-02 onwards ( for post 30-5-2010 transactions) except for impugned assessment year. Nothing contrary is brought on record by learned DR to disprove this contentions of the assessee. We have also carefully gone through number of transactions, volumes, frequency etc. of investment in shares. Also observed that assessee has contended that for the transactions squared within 30 days of acquisitions , the same be treated as business income and for transactions for sale of shares which were sold beyond 30 days of purchase of and not more than twelve months , the resultant gains from the sale of shares be classified and brought to tax under the head ‘Income from Capital Gains’ for the shares dealt which are listed securities as per mandate of Section 2(42A) of 1961 Act. We do not find any merit in the contentions of the Revenue of treating assessee as a trader in shares for impugned assessment years. Principles of res-judicata no doubt are not applicable to the income-tax proceedings but principles of consistency are to be applied (Ref: Radhasoami Satsang v. CIT (1991 (11) TMI 2 - SUPREME Court). Thus we hold that the assessee is an investor in shares and gains arising from sale of shares for the period of holding from 30 days to not more than twelve months be treated as short term capital gains in case of listed securities as are provided as per mandate of Section 2(42A) of 1961 Act, and where period of holding prior to sale of share is up-to 30 days, the same is to be treated as income from ‘Profit and Gains of Business or Profession’ as it has an indica of trade and shall be brought to tax accordingly. We further hold that opening and closing stock of shares held as investments are to be valued at cost as is valued by the assessee and not at cost or market value whichever is lower as is directed by learned CIT(A), as the shares were held as investments and not as stock-in-trade. - Decided partly in favour of assessee
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