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2017 (4) TMI 518 - AT - Income TaxIncome from transactions in securities - “capital gains” or " business income" - Held that:- Assessee company is engaged in the business of trading in securities. During the year assessee has shown the sale of securities as business receipts at ₹ 73,91,026/-. We also observe that assessee has entered into as many as 7000 transactions of purchase and sale of around 4lacs equity shares of a single company namely Suraj Stainless Steel Ltd. and the total value of shares sold is ₹ 8,58,03,298/-. The transactions of purchase and sale carried on by the assessee in which even on a single day i.e. 14.11.2006 almost 63 transactions have been entered into of the same scrip. We also observe that the total share capital of the company was ₹ 2,42,000/- and the unsecured loan stood at ₹ 45lacs which proves the fact that assessee has borrowed funds for entering into the share transactions. We also find that assessee has not controverted the fact during the assessment proceedings that the purchase and sale transactions of the very same scrip i.e. Suraj Stainless Steel Ltd. was entered into in preceding financial year also and sale value was treated as business turnover and unsold shares were shown as stock in trade. Thus assessee is regularly in the business of purchase-sale of equity shares, share transactions entered during the year were in large number, funds were borrowed for the purpose of trading, no separate account has been maintained for the investment portfolio and all the transactions of purchase sale raised are only for one scrip namely Suraj Stainless Steel Ltd. In these facts and circumstances, assessee cannot take shelter of the CBDT Circular no. 4/2007 dated 15.06.2007. As far as the decision of co-ordinate bench in the case of Sugamchand C. Shah vs. ACIT (2010 (1) TMI 942 - ITAT, Ahmedabad) is concerned there have been various decisions thereafter by the Jurisdictional High Court wherein it has been held that transactions cannot be bifurcated by the period of holding and actual nature of transactions with surrounding circumstances are to be seen and therefore the directions of ld. CIT(A) given to Assessing Officer will not stand for. In the totality of facts we are of the considered opinion that the alleged short term capital gain shown by the assessee for A.Y. 2007-08 & 2008-09 should be treated as business income. - Decided in favour of revenue.
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