2012 (2) TMI 72

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..... 4-1-2012 - SHRI RAJENDRA SINGH, SHRI SHRI V.D. RAO, JJ. Appellant by Shri Parthasarathi Naik Respondent by: Shri Pradip Kapasi Shri Manish Desai O R D E R Per RAJENDRA SINGH (AM) This appeal by the revenue is directed against the order dated 22/4/2010 of CIT(A) for the assessment year 2007-08. The only dispute raised in this appeal is regarding nature of income earned by the assessee from purchase and sale of shares. 2. The facts in brief are that the AO during assessment proceedings noted that the assessee had declared long term capital gain amounting to Rs.1,21,71,847/- and short term capital gain of Rs.3,13,45,855/- from purchase and sale of shares. The AO noted that the assessee dealt in shares of numbe .....

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..... e that it was an investor, the department had not accepted the decision of CIT(A) and had filed appeal before the Tribunal and issue was still pending. He, therefore, rejected the claim of the assessee and held that the assessee was trading in shares and accordingly treated capital gain, both short term capital gain and long term capital gain, as business income. 2.2 In appeal, CIT(A) held that the Tribunal on the same set of facts had allowed the appeal of the assessee in assessment year 2005-06 in ITA No.4506/M/2009 and accepted the clam of the assessee that it was an investor. He, therefore, following the decision of the Tribunal in assessee s own case in assessment year 2005-06 (supra), set aside the order of AO and accepted the claim .....

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..... the period of one year, the assessee declared short term capital gain. Merely on the ground that volume of transaction was heavy and capital gain earned was large, it could not be held that the assessee was trading in shares. In this case on identical facts in assessment year 2005-06, the Tribunal in ITA No.4506/M/09 held that the assessee was an investor and accepted the claim of capital gain dismissing the appeal of the revenue. This decision was followed by the Tribunal in assessment year 2006-07 in assessee s own case in ITA No.1159/M/2010 and appeal of the revenue was again dismissed accepting the income as capital gain. In that year the assessee had earned much larger short term capital gain of Rs.14.61 crores compared to long term c .....

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