TMI Blog2014 (5) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... tire shareholding under one head, is not conclusive of the matter. The Revenue has rightly considered the income declared by the assessee as STCG as 'business income' - its quantum would require to be reworked - The assessee has claimed interest expenditure at Rs.20.50 lacs – it would require being apportioned against different businesses, as well as, where so, investment activity - The AO has considered the entire interest against interest income falling under the head 'income from other sources', which is inconsistent with his own finding of the business being financed, if only partly, by borrowed capital - It is only the net income so arrived at that would stand to be assessed as 'business income' – Decided partly in favour of Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee maintained separate portfolios for the investment and the trading activity. Adverting to the assessment order for A.Y. 2005-06 (PB pgs. 33-35), he continued, that the same stood accepted for that year in regular assessment. Further, the A.O. has though made reference to the relevant CBDT Circular (vide Notification No. 45 of 2008 dated 24.03.2008), has not shown as to how the same is applicable in the facts of the case. 3.2 The ld. Departmental Representative (DR), on the other hand, would contend that as is well settled res judicata is not applicable to the proceedings under the Act. Accepting the assessee's claim for an earlier year, which may well be consistent with the facts of that year, would not bind the A.O. for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, a Chartered Accountant by qualification, returned the following incomes for the year: (para 3.5 of the asstt. order) Amount (Rs.) A Income from salary 45,000 B Future transactions loss (-) 4,08,104 C Speculation profit (-) 41,705 D Capital gains 15,74,397 E Dividend on shares mutual funds 31,240 The textile business is conspicuous by its absence; the lone transaction in its respect being by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the transaction exhibit a systematic activity. In fact, only one who is well versed with the market would undertake transactions in such volume, frequency, regularity, also assuming financial risk by incurring interest-bearing debt. Loans to the extent of Rs.170.01 lacs have been assumed, which are again deployed in business. The assessee's own capital represents only 30% of the total capital employed in business. The facts are self-speaking, and leave us in no manner of any doubt of the assessee being engaged in trade in shares and securities - in all its various aspects, even as for tax purpose a different treatment is to be accorded thereto, viz. speculative or non-speculative. It is this that prevailed with both the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne group head, i.e., 'investments' (PB pg.3). What is also relevant and material is the basis on which the classification, where so, is made, and whether the assessee is able to substantiate the same in terms of the underlying principles distinguishing between 'investment' and 'stock-in-trade'. We have already observed and emphasized on the volume, regularity and high frequency of the transaction, signified by a low holding period on a regular basis. The treatment accorded in books, which we found to be not in agreement with the activity in-as-much as the assessee has clubbed its entire shareholding under one head, is not conclusive of the matter. 4.5 We are, therefore, of the considered view that the Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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