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TMI Blog2013 (12) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... e just on the ground that the same issue was decided in favour of the assessee in A.Y. 2006-07, without appreciate the fact that she has held various shares for very short time and in fact earned profit in respect of shares which are held for a period of 30 days or less and the fact that the Department has not accepted the decision of the CIT(A) for AY 2006-07 and has preferred an appeal to the hon'ble ITAT." 2. At the outset, ld.AR Mr.J.P.Shah has informed that in assessee's own case for A.Y. 2006-07 a view has been taken by the ITAT "B" Bench Ahmedabad in ITA No.2494/Ahd/2010 titled as "Asst.CIT vs. Smt. Jahnvikaben" vide order dated 13/05/2011 as follows:- 5. We have heard the parties and perused the material on record. The Id. AR very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sale are frequent, or there are substantial transactions in that item, it would indicate trade. Habitual dealing in that particular item Is Indicative of Intention of trade. Similarly, ratio between the purchases and sales and the holdings may show whether the assessee is trading or investing (high transactions and low holdings indicate trade whereas low transactions and high holdings indicate Investment). (4) Whether purchase and sale Is for realizing profit or purchases are made for retention and appreciation in its value ? Former will Indicate Intention of trade and latter, an Investment. In the case of shares whether intention was to enjoy dividend and not merely earn profit on sale and purchase of shares. A commercial motive is an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with them. Whether it is the argument of the assessee that is violating those legal requirements, if it is claimed that it is dealing as a trader in that Item ? Whether it had such an intention (to carry on illegal business in that item) since beginning or when purchases were made ? (10) It is permissible as per CBDT's Circular No. 4 of 2007 of 15th June, 2007 that an assessee can have both portfolios, one for trading and other for investment provided it is maintaining separate account for each type, there are distinctive features for both and there is no intermingling of holdings in the two portfolios. (11) Not one or two factors out of above alone will be sufficient to come to a definite conclusion but le cumulative effect of several f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares are valued at cost and Revenue is holding such accounting treatment as lent in the past. Thus, there cannot be a fixed criteria to decide as in the present case ir assessee has traded in shares even though assessee held them as investment. 18. Though it has been held in the case of Sarnath Infrastructure (P) Ltd. (supra) that delivery of is an important criteria for holding that assessee is investing in them but after dematization where shares are delivered in the demat account the next day, it cannot be held that in all such t would be investment and not trading. If that is so held, then all those traders in shares in whose demat accounts shares are delivered can be said to have earned capital gains and not profits. Therefore, only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment and on their sale short term capital gain should be charged. When shares are held for less than a month, gain on them should be treated as profit from business." Since basic data required to work out the frequency of transactions of holding period is not collected by the AO, we restore the matter back to the file of AO and direct him to give opportunity to the assessee to work out on the basis of holding period as to what would be the business income and what would be the capital gains as per the decision of the Tribunal in the case of Sugamchand C. Shah vs. ACIT (supra). In other words, the AO will work out business income/capital gains in accordance with the decision in Sugamchand C. Shah(supra). As a result, appeal filed by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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