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2015 (11) TMI 807 - BOMBAY HIGH COURTTransaction of shares - Capital Gain or business profits - whether the entire activity of declaring the gain made on account of sale of shares/units of mutual funds was only with the view of avail of lower rate of taxation applicable to profits made on account of capital gains? - Held that:- This issue has been dealt with by the Tribunal by recording the fact that it was not the case of revenue before the Tribunal that the respondent-assessee had converted it's stock in trade into the investment with the intention to avoid and/or reduce the tax. In the absence of any factual basis the allegation that the entire exercise was carried out as investment only to avail of the concessional rate of tax as urged by the revenue cannot be accepted. Moreover, on the issue of long term capital gains with regard to mutual funds, there are concurrent findings of facts by the CIT(A) and the Tribunal in favour of the respondent-assessee. Whether Tribunal right in holding that the mere entry in books of accounts that shares are held as investment, make the respondent individual an investor, whereas the period of holding of these scrips, the frequency, the volume and value of transactions are indicative of being trader and not an investor? - Held that:- We find that the Assessing Officer in the Assessment Order gives a table of the transaction entered during the year. From the table, it is evident that a single purchase/sale transaction which are received/delivered in multiple lots i.e. more than one lot are each considered as separate transaction. The Assessing Officer has computed each lot as a separate transaction resulting in inflated figure of 205 transactions. So far large value of transactions are concerned, one must not loose sight of the fact that large value has to be looked at in the context of the wealth of the person concerned. In this case, the respondent-assessee is engaged in a very profitable business of embroidery which has turnover of ₹ 19.28 crores and profit of ₹ 9 crores during the subject assessment year. Thus the value of the transactions for purposes of deciding the issue is to be considered from case to case and there can be no absolute value beyond which the transaction would be considered to be trading. Therefore in the facts of the present case, the view taken by the CIT(A) and Tribunal on the aforesaid facts is a plausible view. The determination of whether an assessee is carrying a trading or investment activity is to be determined on a cumulative assessment of various factors, which has in fact been done by the CIT(A) and the Tribunal. The revenue has not been able to show that the factual finding recorded by CIT(A) and the Tribunal is in any manner perverse and/or arbitrary. - Decided in favour of assessee.
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