TMI Blog2003 (3) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ganeshilal Lal Chand (1984) 43 CTR (Raj) 120 : (1985) 154 ITR 274 (Raj) 2. Gemini Leather Stores vs. ITO Ors. 1975 CTR (SC) 1127 : (1975) 100 ITR 1 (SC) 3. Star Automobiles vs. ITO (1989) 78 CTR (MP) 105 : (1989) 178 ITR 613 (MP) 5. The leaned Departmental Representative relied upon the order of the learned CIT(A). 6. After perusal of the facts of the case, we find that this is not a case of change of opinion. It is pertinent to note that there is distinction between change of opinion and the finding of erroneous nature of earlier assessment on detection of mistake on the issue which was not earlier considered by the AO. Reliance was place in the judgment of Gujarat High Court in the case of CIT vs. Industrial Machinery Manufacturing (P) Ltd. (1985) 151 ITR 533 (Guj). In this case the AO entertained prima facie the belief that the income declared by the appellant was a business income and not from capital gain and this belief of the AO was also sustained by the learned CIT(A). 7. The learned authorised representative also contended that the AO was not justified in issuing notice under s. 143 after the expiry of time available for issuing of notice under s. 143(2) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different years shown purchases, redemption, conversion into equity shares, etc., but there is no sale of debentures. 7. All the purchases of shares and debentures are from public issues or right issues or conversion from debentures. No purchases were directly made from the market. 8. Just because the appellant had admitted to short-term capital gains, it does not mean that the appellant is engaged in business of dealing in shares. 9. In the wealth-tax assessments, the investment in shares and debentures have been treated as capital investment and not as stock-in-trade. 10. On 30th March, 1990, out of 125 companies whose shares the appellant is holding, only in 7 companies the appellant s holdings are worth more than Rs. 5,000. The appellant has made a total investment of Rs. 11,64,025 in shares of 125 companies as on 30th March, 1990. Rs. 10,23,959 have been invested in 7 companies only. Special mention has to be made of investment of Rs. 9,50,000 in shares of M/s Oswal Agro Mills Ltd. by right issues. 11. The appellant is, therefore, a small investor and has invested small amounts in different companies. Sales of shares of various companies have been effected long afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the asst. yr. 1990-91, in addition to the old investment of Rs. 1,15,675, fresh purchase of debentures worth Rs. 10,66,060 were made out of which there was a conversion into equity shares worth Rs. 9,55,410. It is, therefore, seen that the appellant has been purchasing convertible debentures from the market and deriving substantial benefit from their conversion into equity shares. As such, she has not made investment substantially in the purchase of shares. (vii) It is also not necessary that the appellant should have been regularly and systematically carrying on the business of purchases and sale in all the earlier years for it to be held in the years under consideration that these transactions are adventure in the nature of trade. (viii) For transactions amounting to trade, it is not always necessary to maintain an office, employees and regular and organised activities in a business premises, though the assessee does have a regular office. Such activities can be carried out by a person single-handedly. It is the activity that must be organised. It is seen that in the asst. yr. 1989-90, the appellant purchased 4644 shares of M/s Oswal Agro Mills Ltd. through rights issues o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is a regular income-tax assessee for the last many years. In the wealth-tax assessment, the investment in shares and debentures had been treated as capital investment and not stock-in-trade. The learned authorised representative has given the detailed contention in support as discussed in the order of the learned Dy. CIT(A). The learned Dy. CIT(A) has also given the detailed reasons for treating the income from sale of shares as capital gains for the asst. yrs. 1986-87, 1987-88 and 1988-89 in appeal Nos. 86, 87 and 88/IT/1993-94/HMG through his order dt. 26th Sept., 1994. In respect of purchase of shares, it is true that the shares were allocated to the appellant on application to the company by way of participation in the offer of public issue. This shows that the appellant was having the motive of preserving or storing of monies worth in the financial portfolio of such nature that she did not suffer adversely on account of inflation and on account of cost of capital or on account of the alternative cost of funds. These kinds of investments by the individuals are not of dealers or trade but with a view to obtain optimum consideration of the conflicting objectives st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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