TMI Blog2012 (12) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... see as long term capital gain is reasonable. - ITA No.4049/Mum/2010 - - - Dated:- 20-7-2012 - SHRI B.R. MITTAL AND SHRI RAJENDRA SINGH, JJ. Appellant by : Shri V.V. Shashtri Respondent by : Shri Hemant Bahedia ORDER PER RAJENDRA SINGH, AM: This appeal by the revenue is directed against the order dated 24.2.2010 of CIT(A) for the assessment year 2007 2008. The only dispute raised by the revenue in this appeal is regarding the nature of income from sale and purchase of shares. 2. The facts in brief are that the AO during the assessment proceedings noted that the assessee had declared income from business, short term capital gain, and long term capital gain, from sale of shares in addition to income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire income from sale and purchase of shares as business income. 3. The assessee disputed the decision of the AO and submitted before CIT (A) that the assessee had made a clear distinction between the trading shares and investment shares and had maintained two different portfolios. Though the assessee was a sub broker, he was also making investment in shares. It was further submitted that only because the assessee had sold the shares in a short period, it could not be held that the assessee was not an investor. CIT(A) accepted the explanation given by the assessee. It was observed by him that there was no bar on a person doing both trading as well as investment activity. The assessee had taken delivery of all the shares through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had made repetitive transactions in the same script clearly indicating that he was trading in shares. The assessee was a sub broker dealing in shares which also showed that the assessee had intentions to make profit from sale of shares and not to hold them as investment. It was accordingly urged that the order of the AO to treat the income declared as business income should be upheld. 4.1 The ld AR for the assessee on the other hand submitted that the assessee in addition to trading had also an investment portfolio for which separate account had been maintained. The assessee had treated all shares purchased in which delivery had been taken on investment account and income from these shares had been shown as capital gain. It was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Hon'ble Supreme Court in the case of CIT vs. Madangopal Radheylal (73 ITR 642). The actual conduct has to be evaluated by analyzing of the holding period etc. An investor makes purchases with long term goal of earning income from the investment and he is not tempted to sell the shares on every rise and fall in the market which are the attributes of a trader. Since income from investment in shares which is in the form of dividend is received annually, normally an investor is expected to hold the shares for more than a year. However there may be situations when the investor may also sell the shares after short holding in order to reshuffle portfolio when prices are falling or to encash investment in case of exceptional gain or for so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by the Tribunal in the said case. We have carefully perused the order of the Tribunal in the case of Gopal Purohit (supra), but we find that there is no universal finding in that case that all delivery based transactions have to be treated as investment. It is pertinent to note that the Tribunal in case of Gopal Purohit (supra), had decided the case following the decision of Tribunal in case of Sarnath Infrastructure Pvt. Ltd vs. ACIT (2009) 120 TTJ 216 holding that facts in the case of Sarnath Infrastructure Pvt. Ltd (supra), were identical. However, it is noted that in Sarnath Infrastructure Pvt. Ltd (supra), the shares sold out of investment account had been held for 2-3 years and revenue could not show any shares sold which had been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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