TMI Blog2014 (3) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances for the year under consideration in comparison to the facts and circumstances of the earlier years as well as in the subsequent year - the AO is not permitted to take a different view on a particular issue in the absence of any change in the facts and circumstances - when the claim of the assessee was accepted in the earlier years as well as in the subsequent year then to maintain the principle of consistency the claim of the assessee cannot be denied until and unless there is a material change in the facts and circumstances in the year under consideration - the surplus arising from purchase and sale of shares in the case of the assessee cannot be treated as business income - the claim of the assessee is allowed - the order of CIT(A) to the extent of treating the capital gain as business income is set aside – Decided in favour of Assessee. - ITA No. 4135/Mum/2012, ITA No. 4558/Mum/2012 - - - Dated:- 7-3-2014 - Shri Sanjay Arora And Shri Vijay Pal Rao,JJ. For the Petitioner : Dr. K. Shivaram and Shri Parab, S. Savia. For the Respondent : Shri Deepak Sutariya ORDER These cross appeals are directed against the order dated 27.04.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of holding period more than 10 days as short term capital gain instead of business income and deleting the addition made by the assessing officer, without considering the detailed arguments given by the assessing officer which clearly establish the motive of the assessee to indulge in trading activity. 02. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the Assessing Officer by treating income of Rs. 1,09,952/- arising out of share dealing in HDFC mutual funds as business profit instead of short term capital gain . 4. Before us, the Ld. AR for the assessee submitted that the assessee is a partner in the partnership firm and, therefore, the main activity of the assessee is devoting time to the partnership firm and no dealing in shares. The Ld. AR has further contended that the assessee is a qualified Engineer and mainly involved in his business carried on through partnership firms and, therefore, the assessee cannot devote time like a dealer in shares as the assessee has to travel domestic as well as foreign in connection with business of the partnership firm. He has further submitted tht no interest b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... series of decisions, the Tribunal as well as Hon ble High Court held that when the shares are held as investment from the date of purchase then the assesseee is an investor and merely because the assessee has sold the certain shares within a short period due to volatile condition of the market and to earn gain does not change the character of investment. He has further submitted that the short term capital gain cannot be bifurcated on the basis of holding period. The transactions of sale and purchase as a whole which is under one portfolio should be considered holistically and not by bifurcating the same. Thus the Ld. AR has submitted that the view taken by the CIT(A) to the extent that the gain arising from the sale of shares within a period of 10 days has to be treated as business income is not sustainable under law as no such bifurcation has been provided under the Act. 5. On the other hand, LD DR has submitted that the assessee has been trading in shares frequently and in short intervals. The major income of the assessee is only from short term capital gain and not from other activities that too has been earned from the purchase and sale of shares up to the 50 days. He has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IMG 7. It is clear from the details given above that out of the total 27 scrips from which short term capital gain earned by the assesseee 11 scrips were held for a short period of 6 to 9 days and remaining scrips were held by the assessee for an average period of 90.44 days ranging from 1 month to 8 months. There are various factors which has to be taken into consideration for determining the nature of transaction of purchase and sale of shares. These factors includes, period of holding, frequency of transactions , No. of transactions, motive of purchase, own funds or borrowed funds used for purchase of shares and payment of interest, treatement of shares in the books of accounts etc. Therefore, no single criteria can be a decisive factor to determine the nature of transaction but a number of parameters and criteria has to be taken into account. 8. In the case in hand, the total number of transaction carried out by the assessee are 59 in 29 scrips out of which short term capital gain is earned only from 27 transactions. It is clear that as far as number of transactions and frequency of the transaction is concerned these are very less and would not indicate that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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