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TMI Blog2012 (9) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... hat transactions involving purchase and sale of shares resulting in an income of Rs..95.38 lacs do not constitute trading but are transactions on capital account. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that income of Rs..95.38 lacs from purchase and sale of shares is not assessable as business income u/s. 28 of the I.T. Act but as Short Term Capital Gains." 2. The only issue involved in the present case is whether the income from purchase and sale of shares is to be assessed as business income or as short term capital gains. 3. The relevant facts of the case are that the assessee is a company engaged in the business of investment in shares, securities, etc. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April, 2005, a part of the investment division of 'Famycare Limited' has been transferred to the assessee company and accordingly assets and liabilities of such demerged company investment division stood transferred to the assessee company. As a result of which, the assessee had substantial increase in the source of funds which were mostly applied in investment of shares and securities. During the year, profit on sale of investment was at Rs..1,02,41,957/- and dividend earned was at Rs..12,19,845/-. The details short term capital gains on share and securities comprised of as under :- Rupees (a) On sale of investments brought forward from earlier year 6,85,709 (b) On sale of shares allotted in IPO during the year 87,21,111 (c) On sale/r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier assessment year i.e. 2005-2006, has held that the sale of shares in the case of the assessee is to be assessed as short term capital gain and not business income. The relevant finding of the CIT(A) has been reproduced in para 6.4 of the appellate order. 5. Learned CIT(A) duly appreciated the contention of the assessee and held that the Assessing Officer has primarily made the disallowance by following the earlier assessment order for the assessment year 2005-2006, which has been reversed by the CIT(A). He further held that the intention of the assessee as noted from the final accounts of such investments, is that of an investor and not a trader and the investments have been made from its own funds and no loan was taken for this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all, it is seen that the Assessing Officer has primarily relied upon the finding of the Assessing Officer in the immediately preceding assessment year i.e. AY 2005-06. Such a finding of the Assessing Officer has been reversed by the CIT(A), wherein, it has been categorically held that the sale of shares and securities in the case of the assessee, amounts to short term capital gain and not business income. Against this order, no second appeal has been filed by the Department, and, hence, it has attained finality. This aspect of the matter has also been accepted by the Assessing Officer in the subsequent year as pointed out by the learned AR which is evident from the copy of computation of income and the assessment order dated 8-12-2009 passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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