9911796707
TMI Blog2012 (7) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... t as against Short Term Capital Gains and Long Term Capital Gains declared by the assessee without appreciating the facts of the case properly. (b) In doing so, the CIT(A)-I, Agra has erred in law and on facts by ignoring the detailed facts put together by the Assessing Officer within the true spirit of CBDT's Circular No.4 of 2007 dated 15.06.2007. 2. That the appellant craves leave to add or delete or alter or modify any one or more ground(s) of appeal during the appellate proceedings. 3. That the order of the CIT(Appeals)-I, Agra being erroneous in law and on facts be set aside and that the order of the Assessing Officer be restored." 2. The brief facts of the case are that the assessee derives income from purchase and sale of Biri a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as business income or under the head of capital gain. On following these principles the AO has concluded that share transactions done by the appellant is very frequent and hence it cannot be said that these transactions have been done to earn dividend. He has also referred to the share investment account maintained by the appellant where debiting of opening balance, purchase, expenses or interest/brokerage etc. and crediting the sales and closing balance have been shown and hence he equated the share investment account as trading account. Further, he has argued that the volume of transactions carried but by the appellant in shares is very high. He has given the figure of purchase of shares as Rs.2,97,57,212/- and sale of shares as 3,85,93, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has earned a dividend of Rs.4,84,017/- as compared to last year dividend of Rs.1,64,919/-. This dividend income has been earned by the assessee (appellant) on the shares purchased by him and these shares are booked by him in his share investment account. Before me also the Ld. AR on test check basis has shown that the appellant has taken delivery of those shares after purchase, which are booked in share investment account. In fact as per the details submitted by the Ld. AR, the appellant has been earning dividend on the shares booked under the share investment account since the Ay 2001-02 as reproduced in para 3.2 (vi). 3.6 In support of his argument that delivery based share transactions should be taken as capital gain transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volume of transactions in the case cited, volume of transaction in the case of appellant is much less. 3.7 In the assessment order, the AO has also relied on the assessment order for 2005-06 in which the department has treated the profit earned on share transaction as business income. This particular order was adjudicated upon by my predecessor CIT(A)-I, Agra and vide her order No.365/CIT(A)-I/Agra/ACIT-3(1)/MTR/2007- 08 dated 18.02.2009, she has held after considering all the fact and circumstances of the case of the appellant that the profit earned by the appellant on the sale and purchase of shares would be treated as long term and short term capital gain depending on the period. 3.8 The main ground for treating the profit shown by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.33,14,230/- as STCG and Rs.76,053/-as LTCG as shown by the appellant in the return of income. Since on sale of shares for LTCG, the appellant has paid STT, it will be exempt under section 10(38) as claimed by the appellant. In view of the above decision the ground no.1 to 10 are allowed." 4. The Learned Departmental Representative relied upon the order of Assessing Officer whereas the Ld. Authorised Representative relied upon the order of CIT(A) and submitted that in Assessment Year 2005-06 the issue has been decided in favour of the assessee by CIT(A). The Revenue filed appeal before the I.T.A.T. and I.T.A.T. has dismissed the Revenue's appeal in ITA No.191/Agr/2009 order dated 06.04.2011. Ld. Authorised Representative further submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Capital Gain on sale of shares on delivery basis and the intention of the assessee was to earn dividend. It has been noted from the order of the CIT(A) that the assessee has earned dividend of Rs.4,84,017/-. This dividend has been earned by the assessee in respect of investment in shares. Thus, the related shares were shown in investment account in books of account as noted by the CIT(A). This fact was noted by the CIT(A) after verifying the relevant books and records. The assessee is following such practice since A.Y. 2001-02. The assessee has recorded the share transaction in books of account in first set of transaction as investment in shares and second set of transaction investment in shares for the purpose of business. The bifurcation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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