9911796707
TMI Blog2014 (4) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... riefly for the purpose of this appeal are that the assessee deals in shares. It declared a total income of Rs.83,78,279/-. During scrutiny, it was discerned that the assessee had also invested and sold mutual funds apart from shares. The AO also found that the assessee derived income from interest, dividend and surplus realized on sale of shares and mutual funds. As to the precise issue of the sale of mutual funds, the facts appearing on the record are that the assessee had invested in these funds and shown them in its investment account and had not characterized it as stock-in-trade. This position apparently had been reported and accepted for the previous years. Furthermore, it appears that the assessee held its mutual funds for about two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his order recorded as follows: - ''i. Assessee has employed its own funds out share capital and accumulated free reserves that there was no borrowing at any time. ii. Assessee's is lacking proper infrastructure and is only holding Rs.2.02 lacs (WDV Rs.1.39 lacs) worth of fixed assets. iii. Assessee has only one employee to whom an aggregate salary of Rs.60,000 has been paid. iv. Assessee's treatment of mutual fund as investment is consistent since 2002-03, even when no special privileges of any tax concession was available. Merely because subsequently assessee is entitled to some benefits/tax concessions, the whole transaction cannot be now pulled under the umbrella of Business. v. Auditors report and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether profits or amounts received are business income or short/long term capital gains. One often underlined and widely used test is the ''volume, frequency, continuity and regularity'' of the transactions test. This is in addition to other indicia such as maintenance of separate portfolios in the same set of books of account for ''investments'' or maintenance of separate books of accounts for the two activities, and whether borrowed capital was used. Having regard to these and the further fact that the assessee had kept these amounts separately in an investment account and held these mutual funds for about two years, this Court is of the opinion that the Tribunal clearly fell into error in holding that the amount of Rs.58,71,144/- was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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