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TMI Blog2012 (11) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... a assessment year in hand i.e. 2005-06. 2. Whether the profits earned by the assessee of Rs. 3,74,65,669/- on sale of shares are to be treated "capital gains" as claimed by the assessee or business income as held by the lower authorities? 3. Issue No.1:- Brief back drop of this issue is that the assessee who is involved in the business of investments and dealing in shares, securities, filed its return declaring total income of Rs. 14,60,52,720/-. In the said return, it had shown dividend income of Rs. 76,49,289/- as 'exempt' income. 4. The AO sought explanation as to why the expenses in relation to earning of the above exempt income be not disallowed. The assessee explained that it had not incurred any direct expenditure. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company had shown total profit earned from share trading as Rs. 133,096,177/-. The assessee claimed the said profits to be "capital gains" i.e. long term and short term. 11. The AO issued show cause notice to assessee as to why the above said profits be not treated as 'business income'. The assessee submitted that it had held the shares in question as 'stock' as well as investment. Per assessee, it had earned 'short term capital gain' as well as 'long term capital gain'. Particularly in case of long term capital gains, the holding period of the shares in question was more than one year. It also relied on some case laws i.e. Arjun Kapur vs. Dy. CIT 70 ITD 161 etc. 12. The Assessing Officer did not accept assessee's contention. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs u/s 143(3) of the Act pertaining to Assessment Years 2001- 02, 2002-03, 2003-04, 2004-05 as well as Assessment Year in hand i.e. 2005-06, wherein assessee has placed on record long term capital gains computation at pages 4, 15, 24, 32 and 42 respectively. 16. Further, ld AR has referred to assessment order of the above assessment years available at pages 11, 16, 26, 34 respectively wherein assessee's business has been stated to be that of 'shares investments'. Besides this, statements of capital gains in all the above assessment years have also been referred to. 17. The ld AR by referring to the findings has also cited case laws namely 1. Gopal Purobit vs. JCIT 122 TTJ 287 2. Janak S Rangwala vs. ACIT 11 SOT 627 3. CIT vs. Naishadh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate Bench in the case of Gopal Purohit (supra) which has been upheld even up to Hon'ble Apex Court that an assessee can maintain two different accounts i.e. investment and trading. The intention of assessee is clear and so, no inference can be drawn against assessee. 19.1. Further, the norm of consistency also requires that if an assessee has been treating a particular transaction as an investment which has been accepted by the Department by passing orders u/s 143(3), the same cannot be disturbed in any particular year without any valid reason. In this regard, we rely on the Hon'ble Bombay High Court judgment in 336 ITR 287 CIT vs. Gopal Purohit. 20. Besides this, the only inference which has been drawn by the Ld. CIT (A) is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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