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TMI Blog2012 (7) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A) in treating the investment and sale thereof by the assessee of 5000 Tech Mahindra Shares as business transaction assessable as business income and not as a short term capital gain. 3. In brief, the facts are that the assessee is an individual and filed a return of income for the assessment year 2007-08 declaring income of Rs.39,44,476/- which included short term capital gain of Rs.38,93,102/-, pension income and income from other sources i.e. bank interest. The return of income was subjected to a scrutiny assessment u/s.143(3) of the Act whereby the declared income of Rs.39,44,476/- was assessed as such, the only change being that the short term capital gain declared by the assessee of Rs.38,93,102/- was treated as a busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as Exhibit- 3 three in the Paper Book. The Ld. Counsel further pointed out that the specific transactions of the 5000 shares of Tech Mahindra was done by the assessee for the reason that the investee company was likely to bag $ 1 billion software deal British Telecom and therefore it was found to be a sound investment. The Ld. Counsel pointed out that the subsequent sale of 5000 shares on 17/01/2007 and 09/02/2007 resulted in a profit of Rs.29,00,260/- which clearly showed that the investment decision was justified. The Ld. Counsel for the assessee submitted that the CIT(A) erred in not appreciating that the transaction of 5000 Tech Mahindra shares was of similar nature as in the case of other two scrips namely, Reliance Industries and In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried out by the assessee of 5000 shares of Tech Mahindra which is claimed to be for investment purposes and therefore assessable as capital gains. The Assessing Officer as well as the CIT(A) have held that the same is a business transaction. The primary reason weighing that the CIT(A) to hold so is that in the Tech Mahindra scrips there was intermingling as some transactions other than the transaction of 5000 shares have been treated by the assessee himself as business transactions. More over, as per the CIT(A) in case of existence two portfolios i.e. one on account of investment and the other on account of trading, the onus was on the assessee to establish as to which transactions relate to either of the two. In this context of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n resulted in a gain to the assessee in as much as the assessee made a profit Rs.29,00,260/- in a short span of time. The other transactions in the scrip, have been admitted to be done with trading in mind in as much as the transactions have been squared up almost immediately. In our considered opinion in order to appreciate the plea of the assessee it has to be kept in mind that the assessee is a retired employee of Lonavala Municipal Corporation and is 78 yrs. old of age with no history of being engaged in any form of business or trade. It is also stated that when assessee purchased 5000 Tech Mahindra shares on 17/11/2006, he invested Rs.58,52,200/- and the entire amount is said to be from own funds of the assessee. Quite clearly the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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