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TMI Blog2014 (1) TMI 1599X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the year. The contention of the assessee that all these shares were shown under the investment portfolio, therefore, the long term capital gains or short term capital gains, as the case may be, has to be accepted. However, since the transactions were voluminous and frequent, therefore, the AO concluded that the purchase and sale of shares on frequent transactions are to be held as business transactions. Accordingly, he treated the short term capital gain shown by the assessee as income from business. 4. Detailed submissions were filed before the CIT(A). Reliance was placed on various case laws. It was explained that in earlier year also, the assessee has shown investment in shares under investment portfolio. It was submitted that the long term capital gain shown by the assessee has been accepted by the AO himself. Accordingly, it was submitted that the short term capital gain shown by the assessee has to be accepted. Reliance was placed on the decision in the case of Gopal Purohit Vs. JCIT, reported in 120 TTJ 877 (Mum) and various other decisions. Learned CIT(A) was also in agreement with the findings of the AO. Accordingly, he confirmed the order of AO. 5. The contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras 9 & 10, which are as under :- "9. We further noted that against the order of CIT(A) for assessment year 2006-07, the department preferred appeal before the Tribunal and the Tribunal discussing the issue in detail and placing reliance on various decisions of the Tribunal i.e. in the case of Dineshbhai C. Patel (HUF),passed in ITA616/Nag/2008, vide order dated 5-6-2009; Gopal Purohit, 20 DTR (Mum)(Trib) 99; the decision in the case of CIT Vs. V.A.Trivedi, 172 ITR 95 (Mum) and the decision of the Hon‟ble High Court in the case of CIT Vs. Gopal Purohit, 228 CTR 582, allowed the issue in favour of assessee. The findings of the Tribunal for the assessment year 2006-07 have been recorded in para 12 to 16, which are as under:- "12. We have carefully considered the rival submissions and, perused the material on record along with the order of the tax authorities below. We have also gone through the case law as has been cited before us. We find that in the case of CIT (Central), Calcutta vs Associated Industrial Development Company (P) Ltd. (82-ITR-586), the Hon‟ble Supreme Court has held as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period, and - Whether the shares once sold have never been re-purchased 14. We noted that in the case of CIT Vs V A Trivedi 172 ITR 95 (Born) Hon‟ble jurisdiction High Court has clearly laid down under para 12 of the order that the onus of establishing that a purchase is made with the intention to trade is on the Revenue. 15. We noted that the main contention of the revenue in treating the gain to be the income from business is the number of transactions and the period of the holding by the assessee. The period of the holding and number of transactions cannot be the only basis to determine whether the assessee has carried out the business in shares transactions. It may be one of the relevant consideration but cannot be the main consideration for deciding whether the assessee in this case is engaged in a business or not. We have to look into all the surrounding circumstances. This is a fact on record that the assessee in this case is engaged in the employment and has derived the salary income. Out of the surplus fund, he invested into the shares and the units and those shares and units has duly been shown by the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee was not to hold the shares as investment. It is also a fact that the assessee derived the dividend income and has also made the investment in the shares not out of the borrowed funds, but out of its own surplus funds. The CIT(A) while allowing the appeal of the assessee has extensively dealt with the various factors as well as various case laws to arrive at a finding that the shares were held by the assessee as a capital investment and not as stock in trade. He has also relied on the decision of this Tribunal in the case of CIT Vs. Dineshbhai C. Patel (supra). It is not denied that the facts involved in this case in the case of Dineshbhai C. Patel (supra) are similar to the facts in the case of the assessee. Similarly, the facts involved in the case of Gopal Purohit Vs. JC1T 20 DTR 99 (Mumbai) were also the same as in the case of the assessee. In all those cases, the Tribunal took the view that period of holding cannot be the basis to determine whether the share transaction entered into by the assessee is a business income or capital gain. In this case also, we noted that the assessing officer has built up his case mainly on the basis o per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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