TMI Blog2014 (1) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 14.74 lacs (Rs. 14,35,398-PMS Management fees and Rs. 39,303-PMS charges) while arriving at the capital gains in respect of shares dealt by the Portfolio Managers – the assessee had transacted only in thirty scrips resulting in STCG were is only fourteen scrips were treating by her resulting in LTCG, assessee had not borrowed any funds for making investments in shares thus if frequency of the shares holding period of the shares availability of borrowed funds, payments of interest on borrowed funds, shares sold by the Portfolio Managers and other similar facts are considered, it becomes clear that assessee was an investor only - in the category of STCG there are many scrips where assessee had invested in the initial public offer and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by resulting in an overall "business loss". 4. On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding the order of the Assessing Officer in taking the view that the Trading and Profit and Los Account could not be recast without the Assessing Officer rejecting the books of accounts. The above grounds are without prejudice to one another. Your Appellant craves leave to amend, alter or delete any of the above grounds or to add any fresh ground(s) either before or at the time of hearing." 2. Assessee,an individual,filed her return of income on 29.07.2008 declaring total income of Rs. 53.35 lacs.Assessment was finalised by the Assessing Officer (AO)on 30.12.2010 determining the total income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the submissions of the assessee and the assessment order, he held that question of nature of the transactions as trading for investment could not be decided on the basis of single factor, that each case had to be decided based on the particulars facts of that case, that there could not be any precedent in the matter of adjudication of the issue of nature of transactions with regard to purchase and sale of shares and securities.Relying upon the orders of Harsad Mehta(ITA No. 1859/ Mum/2009 dated 16.07.2010),Immortal Financial Services Pvt. Ltd. (ITA No. 4094/ Mum/ 2010 dated 20.10.2010)and V.Nages (ITA No. 5410/Mum/2008 dated 24.09.2009),he held that the intention of the appellant could be gathered from the facts of a particular case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, that the Short Term Capital Gain on sale of share was only in respect of thirty scrips, that assessee had never dealt in 152 scrips earning STCG and LTCG, that investment in shares was made by the assessee herself as well as through Portfolio Managers, that assessee had transacted only in thirty scrips that resulted in STCG on sale of shares, that in fourteen scrips resulted in LTCG, that there were only sixteen transactions where the share were sold within 30 days from the date of purchase, rest of the days the holding period was from 42 days to 307 days, that assessee has availed services of three Portfolio Managers for sale and purchase of shares in addition to the 4th Portfolio Managers for Mutual Funds, that assessee had paid Portfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case under consideration is taken into account it becomes clear that she is an investor. It is found that assessee has not dealt in more than 150 scrips resulting in STCG and LTCG. It appears that AO has included the transactions carried out by the Portfolio Managers as the transactions entered into by the assessee. In our opinion, stand taken by the AO and confirmed by the FAA is factual incorrect. Transactions done by the Portfolio Managers cannot be treated as business activities as held in the case of Radha Birju Patel (supra) and ARA Trading Investments (P) Ltd.(supra).It is also found that assessee had not claimed the deduction of Rs. 14.74 lacs (Rs. 14,35,398-PMS Management fees and Rs. 39,303-PMS charges) while arriving at the cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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