TMI Blog2012 (8) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... not justified in treating short-term capital gain declared by the assessee as business income - appeal of the assessee is allowed - I.T.A. No.353(Asr)/2011 - - - Dated:- 28-5-2012 - SH. H.S. SIDHU, SH. B.P.JAIN, JJ. Appellant By:Sh. Vijay Kumar Umat,CA Respondent By: Sh. Amrik Chand, DR ORDER PER BENCH: This appeal of the assessee arises from the order of the CIT(A), Amritsar, dated 05.04.2011 for the assessment year 2005-06. 2. The assessee has raised following grounds of appeal: 1) That the ld. CIT (A) is not justified in upholding the assessment order having failed in discharging the onerous duty as an appellate authority for passing a speaking order which is bad in law and as per facts of the case go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g shares as a investment and all shares were purchased on delivery basis. Further no shares trading on intra-day basis has been done by assessee. Further more assessee has maintained separate records for dealing in shares only to arrive at capital gain. 6) In the order U/s 250 (6) passed by ld. CIT (A) places reliance on the case of Commissioner of Income Tax (Central), Calcutta Vs Associated Industrial Development Company (P) Ltd (82 ITR 586), which justifies that Whether a particular holding of shares is by way of investment or forms part of the stock-in-trade is a matter which is within the knowledge of the assessee who holds the shares and it should, in normal circumstances, be in a position to produce evidence from its records as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged under the head capital gain. iii) AKG Consultant Pvt. Ltd. I.T.A. No.665/Luc/10 Luck bench of ITAT 28.02.2011 :- It was held that the frequency of purchase and sale was not regular to show that assessee was regular trader to earn profit. Further assessee explained before the authorities with documentary evidence that sale of scripts was not a regular feature to consider it as a business transaction and it was not the intention of the assessee to treat the investments as the scripts for regular trade. iv M/s Kamlesh Real Estates Pvt. Ltd. ITA No. 1451/M/2010 20.04.2011 In the present case the assessee has been frequently purchasing and selling shares and the sales in all cases have been made after holding the shares for less than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been so done. 9) That the assessee craves leave for any additions , deletions, amendments, modification, rectification in the grounds of appeal before the disposal of the same. 3. The brief facts of the case are that the assessee besides poultry farm was also doing business of trading in shares for which he was maintaining separate books of account. He was show caused as to why the gains from sale of shares should not be treated as business income. The assessee in his reply dated 25.6.2007 submitted that the assessee is an investor in shares and does not do any trading in shares. The main business of the assessee is poultry farming . In the statement recorded on 25.06.2007, the assessee in reply to question 8 stated that he makes s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2004-05, Rs.820/- as loss on account of his dealing in shares. The AO did not allow security transactions tax and accordingly treated Rs.17,24,751/- as business income of the assessee. The Ld. CIT(A) confirmed the action of the A.O. 4. At the outset, the ld. counsel for the assessee argued and invited our attention at PB32 at the order sheet entry dated 27.06.2007 that the assessee never agreed that he is not doing any investment in shares. It was agreed if there has been trading of shares and it should have been treated as business income in cases where shares not held as investment. In this regard, it was argued if at all there is a trading in shares but nowhere it was submitted or agreed that the shares are not held as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o doing business in trading of shares. This fact is true on the basis of the submission of the assessee and profit declared by the assessee as trading profit of Rs.182390/- on the sales of Rs.2559129/- as value of shares during the impugned year. The AO has not appreciated the explanation of the assessee that he has made the investments also as available at PB-40 and such details were available with the AO as well as before the CIT(A). It has been explained in the statement recorded on 25.06.2007 that the shares are being sold to pay off the loans of the assessee on the advice of ICICI direct.com. Therefore, if any shares after purchase are sold to pay off the loan then the intention of making the investment cannot be held to be as an inten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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