TMI Blog2010 (2) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... erself to constitute business - The income from delivery based transactions are sought to be projected as STCG only because there was actual delivery and because they were shown as investments in the books of account of the assessee - Thus, the conclusion of the revenue authorities that the income from sale of shares declared by the assessee as STCG is income from business is correct and calls for no interference - Appeal is dismissed - 3608 (MUM.) OF 2007 - - - Dated:- 24-2-2010 - R.S. SYAL, N.V. VASUDEVAN, JJ. Satish R. Mody for the Appellant. L.K. Agrawal and P.C. Maurya for the Respondent. ORDER N.V. Vasudevan. Judicial Member. ‑ This is an Appeal by the assessee against the order, dated 6-2-2007 of learned CIT(A)-XXV, Mumbai relating to assessment year 2004-05. 2. Grounds of appeal of the assessee read as follows : On the facts and circumstances of the case and in law, learned CIT(A) erred in confirming the action of the Assessing Officer in treating the short term capital gain of Rs. 9,21,339 as profit from share trading business. Being aggrieved with his erroneous order, the appellant has preferred the appeal. 3. The assessee is an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her books of account (c) the assessee took delivery on purchase of shares and got it registered in her name in D-Mat account (d) that the assessee received income in the form of dividend on shares. 7. The Assessing Officer, however, held that the STCG has in be considered as income from business for the following reasons : (a) There were huge transaction of purchase and sale of shares during the previous year. The assessee held shares for a very short duration which according to the Assessing Officer showed that the assessee was actually engaged and also participated in share trading on regular basis. In this regard, the Assessing Officer has referred to a transactions of purchase and sale of shares by the assessee during the previous year, in which the shares were purchased and sold within a period of one day to 22 days. (b) The assessee declared income from speculative transactions of purchase and sale of shares in 68 scripts. (c) The dividend income from holding of shares was a meagre sum of Rs. 49,825. (d) From the manner in which transaction of purchase and sale of shares were made it was clear that the assessee never intended to earn dividend or hold shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the assessee had been done on scrutiny but were completed under summary assessment scheme. Therefore in the earlier years there was no occasion for the Assessing Officer to have gone into this issue in the case of the assessee. Principle of res judicata will not apply in income-tax proceedings. (g) The assessee entered into transactions of purchase and sale of shares in which there was no delivery and income from such transaction was offered to tax as speculative income from business. In respect of delivery based transactions, the assessee claimed that they were investments and profit on sale of such shares gave raise to capital gains only. (h) Looking into the assessee's conduct, it was clear that she had no intention of keeping the shares to earn dividend or capital appreciation. Learned CIT(A) therefore held that the income from purchase and sale of shares was rightly assessed as income from business by the Assessing Officer. Aggrieved by the order of learned CIT(A), the assessee is in appeal before the Tribunal. 10. We have heard the submissions of learned counsel for the assessee who reiterated the stand of the assessee as put forth before the revenue au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d quantity of article purchased, nature of the operation involved. Saroj Kumar Mazumdar v. CIT [1959] 37 ITR 242 (SC), (e) No single fact has any decisive significance and the question must depend upon the collective effect of all the relevant materials brought on record. Janki Ram Bahadur Ram v. CIT [1965]57 ITR 21 (SC). 12. Keeping in mind, the above broad principles, we shall now examine the case of the assessee. The assessee during the previous year had entered into transactions of purchase of shares of about 200 companies totalling to Rs. 1,01,51,786 and all those shares were sold for a value of Rs. 1,10,45,798. The above transactions were effected by taking and giving of shares at the time of purchase and sale, besides such transactions the assessee had also entered into transactions of purchase and sale of shares where there was no actual delivery. The net profit after expenses on such transactions was Rs. 36,503. Both the aforesaid transactions were in respect of transaction of purchase and sale of shares where the holding period was less than 12 months. The profit on transaction and sale of shares where there was no delivery was offered to tax by the assessee as spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... j) All the shares sold and purchased are of listed companies. (k) Composition of the dividend income is meagre, which goes to show that the assessee never locked for returns from investments. In the light of the above circumstances prevailing in the case of the assessee, we are of the view that the conclusion of the revenue authorities that the income from sale of shares declared by the assessee as STCG is income from business is correct and calls for no interference. 13. We will now deal with the various decisions relied upon by the learned counsel for the assessee. The decision of the Mumbai Bench of the ITAT in the case of Gopal Purohit v. Joint CIT [2009] 122 TTJ 87/29 SOT 117 (Mum.) is a case where assessment in the case of the assessee were done under section 143(3) in the past where the plea of the assessee in respect of identical transactions were accepted by the revenue as investments. On the plea of consistency in the matter of assessments, the Tribunal upheld plea of the assessee. The Tribunal also found on facts of that case that the intention of the assessee at the lime of purchase was to hold shares as investments. The gain of sale of shares were both LTCG a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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