TMI Blog2014 (7) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... riod for determining short term or long term capital gain - The criteria of 30 days for determining business income or capital gain is neither recognized nor acceptable under the provisions of the Income Tax Act - The intention of the assessee in purchasing the shares was clearly to earn profits from sale and not to earn dividend or investment - the shares held by the assessee for longer period may be treated as investment and the profit arising to be treated as long term capital gain - as regards shares held for short duration are concerned, the magnitude, frequency and volume of transactions gives flavor of business income and the same is considered to be income from business – Decided partly in favour of Revenue. - I.T.A. No. 102/Mds/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of shares were made from accumulated savings and no borrowings were reported to acquire the same. The part of investment which was held for considerable time was considered as Long Term Capital Asset and the gains arising there from were treated as Long Term Capital Gains. Income from transactions which were completed within a period of less than thirty days, were held to be business income and the income from sale of shares which were held beyond the period of thirty days but less than twelve months was considered as Short Term Capital Gain. Not satisfied with the order, the Revenue has assailed the findings of the CIT(Appeals) before the Tribunal. 3. Both sides appearing before us at the outset submitted that similar i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee was not to make an investment. There was huge number of transactions in the sale and purchase of shares and there were certain shares which were traded on the same day with the holding period of zero days. Looking into the assessee s conduct, it is clear that she had no intention to keep the shares to earn dividend or capital appreciation. All these facts clearly show that the assessee has been dealing in shares to earn quick profits. 10. The assessee may have been earning income from salary but this does not defy the fact that the sizeable income of the assessee is from trading of shares. The scale of activity is substantial. The period of holding being very short shows the intention of the assessee on quick profits. The tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Whether a particular holding is by way of investment or formed part of stock-in-trade is a matter which is within the knowledge of the assessee and it is for the assessee to produce evidence from his records as to whether he maintained any distinction between shares which were hold by him as investments and those held as stock-in-trade. [CIT vs. Associated Industrial Development Co. Ltd. 1972 CTR (SC) 239: (1971) 82 ITR 586(SC)]. (c) Treatment in the books by an assessee will not be conclusive. If the volume, frequency and regularity with which transactions are carried out indicate systematic and organized activity with profit motive, then it would be a case of business profits and not capital gain, [CIT vs. Motilal Hirabhai Spg. Wv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 30 days for determining business income or capital gain, in our considered opinion, is neither recognized nor acceptable under the provisions of the Income Tax Act. The intention of the assessee in purchasing the shares was clearly to earn profits from sale and not to earn dividend or investment. 14. XXXXXXX 15. Therefore, in view of our aforesaid findings, we are of the considered opinion that the shares held by the assessee for longer period may be treated as investment and the profit arising therefrom be treated as long term capital gain. However, as regards shares held for short duration are concerned, the magnitude, frequency and volume of transactions gives flavor of business income and the same is considered to be income from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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