TMI Blog2014 (3) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... most of the transactions have taken place in April, May and June, 2005 - It is also not in dispute that the assessee held shares of Crance Soft, Vlmta Lab and Yuken India for more than two years and they were shown in the books as investments – thus, the gross receipts should not be taken as the sole criterion to come to the conclusion that the assessee carried on trading activity - Since the revenue was not able to controvert the findings of the CIT(A) – there is no reason to interfere in the order of the CIT(A) – Decided against Revenue. - ITA No. 4735/Mum/2010 - - - Dated:- 26-2-2014 - Shri D. Manmohan And Shri N. K. Billaiya,JJ. For the Appellant : Shri Ravi Prakash For the Respondent : None ORDER Per D. Manm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es declared as long term and short term capital gains. The case was selected for scrutiny. In the opinion of the AO the income earned from sale of shares is assessable to tax as business income, since the Memorandum and Articles of Association of the assessee speaks of dealing in shares. On the other hand, the case of the assessee is that as per the main object the company can invest and hold shares, stocks, bonds, debentures, etc. In fact, the shares in which the assessee dealt with were classified as investment and whenever it was held as stock in trade, according to the decision taken by the company, they were accordingly shown. The AO was, however, of the opinion that the assessee has not followed any logical criteria for classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars and there after sold the same, which were returned as long term capital gains and the shares held in this year were sold in the current year on which it earned short term capital gains and it was accordingly offered to tax. Therefore, the AO was not justified in treating the income therefrom as business income. The learned counsel for the assessee filed a list of total scrips, dates of purchase and dates of sale to indicate that the assessee has been consistently following this method, which was accepted by the AO in the earlier years and thus the AO was not justified in coming to an abrupt conclusion that the income earned on sale of shares has given rise to business income. He also referred to the Balance Sheets of the immediately pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses as stock-in-trade in the books. It is also not shown that any borrowed funds were utilised for purchase of shares. Repetitive nature of transactions, i.e. sale of shares and again repurchase on the next day, was not proved. It is also noticed that the assessee dealt with limited number of stocks and most of the transactions have taken place in April, May and June, 2005. It is also not in dispute that the assessee held shares of Crance Soft, Vlmta Lab and Yuken India for more than two years and they were shown in the books as investments. Under these circumstances we are of the firm view that the gross receipts should not be taken as the sole criterion to come to the conclusion that the assessee carried on trading activity. Since the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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