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TMI Blog2013 (12) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... hort-term capital gain as business income. She ought to have directed the Assessing Officer to tax the short-term capital gains earned on purchase and sale of shares only in terms of section 111A. 3. The learned CIT(A) grossly erred in observing that for an investment no risk is seen and ignored the speech of the Finance Minister while moving the amendment for insertion of section 111A by Finance (No.2) Act, 2004 and consequently erred in confirming the conclusion of the Assessing Officer. 4. The learned CIT(A) failed to appreciate that the appellant was in the business of steel trade on a full time basis and consequently was not in a position to carry on the business of dealing in shares. She further failed to appreciate that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly and she relied on the various principles to submit that her intention was only to increase the gains by reinvesting in the shares and that she has not borrowed funds and has not paid any interest and the conditions for trading as trader does not apply to her. The learned CIT(A), however, did not accept the contentions and dismissed the appeal by holding as under : "6.0 I have gone through the facts of the case and submissions made by the appellant. The main reason that the Assessing Officer delved upon for concluding the capital gains as business income is based on frequency or period of holding and volume of shares. It is observed that the appellant for the first time has shown short term capital gains from trading "futures & options ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer has drawn force for making such an addition on the basis of Circular No.4/2007 dt.15-6-2007 wherein for claiming benefit u/s.lllA the issued has to be determined whether a short term capital is purchased with an intention of holding as an investment or for trading purposes. He therefore concluded that it is not an investment but an intentional activity in the form of business adventure. An intention is an anticipated outcome i.e. guided through a process and a purpose to obtain the end result. What is important is the intention of the appellant and treatment given by in her books of a/c. From the records, it is seen that the appellant failed to press upon the Assessing Officer with satisfaction that the activity of buying and selling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speculative with an intention to earn early and quick profits. Therefore, the appellant's contention that she should be taxed @ 10% has been rejected and upheld the decision of Assessing Officer and accordingly direct the Assessing Officer to treat the transaction as business income". 5. Before us, the learned Counsel took us to the paper book filed in this regard with details of share transactions. It was the contention that assessee for the first time has offered the income made for the assessment year 2005-2006 as capital gain which was accepted under section 143(1) and in the later years also assessee has short term capital gain which was also accepted by the Assessing Officer. However, in this year, it was treated as business income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 412/- can be considered as business, as there is no delivery of the shares. It was further pointed out that 24,900 shares of Cybermedia were purchased and sold on the same day. The learned Counsel also admitted to that extent that this was also can be treated as business. Hence, capital gain of Rs.3,75,107/- also has be treated as business income. Considering these facts, we are of the opinion that rest of the transactions also do come in trading transactions. There can not a situation where part of transaction can be treated as business and other as investment. As can be seen from the details, assessee has invested in the months of July starting from 14.07.2005 to 25.07.2005 in various shares and sold them immediately in the next 2-3 month ..... X X X X Extracts X X X X X X X X Extracts X X X X
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