TMI Blog2014 (8) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances for different years are identical – the AO is directed to accept the claim of the assessee for Short Term Capital Gain on sale of shares – Decided in favour of Assessee. Penalty u/s 271(1)(c) – Held that:- Assessee pointed out that from the assessment order passed by the AO, even after making the corresponding addition in respect of which the penalty is imposed, the total income of the assessee as computed as per the normal provisions of the Act was less than the book profit computed u/s 115JB and the assessee thus was finally assessed for the year under consideration on the basis of book profit as per the section 115JB of the Act – Relying upon CIT vs. Nalwa Sons Investment Ltd. [2010 (8) TMI 40 - DELHI HIGH COURT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trading in shares amounting to ₹ 4,39,436/-was shown by the assessee under the head of profit and gains of business or profession while the profit claimed be arising from the sale of shares treated as investment was declared as Short Term Capital Gain, chargeable to tax at the concession rate of 10%. 5. During the course of assessment proceedings, its claim for Short Term Capital Gain was sought to be supported by the assessee by making the following submissions by a letter dated 25/11/2009: 1.As regards your query why short term capital gains on sale of shares of ₹ 592,574/- should not be treated as income from business and taxed accordingly, we would like to submit as under: a. We have submitted the complete details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -5 which clearly indicate the intention of the management. f. It may also be stated that investment in shares has been valued at cost but in case of inventory which has been valued at cost or market value whichever is low. g. The foremost principal which has been laid down by the Authority for Advance Ruling is whether purchase and sale of shares with the motive of earning a profit, would result in the transaction being in the nature of trade/adventure in the nature of trade; but where the object of the investment in shares of the company is to derive income by way of dividend etc. then the profits accruing by dealing such investments (by sale of shares) will yield capital gain and not revenue receipt from the Profit and Loss account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as brought to tax under the head profit and gains of business or profession . On appeal, the ld. CIT(A), upheld the action of the AO on this issue after taking into consideration the volume and frequency of transactions in shares coupled with shorter duration of holding revised which, according to him, sufficiently displayed the intention of the assessee to trade in shares with profit motive. 7. We have heard the arguments of both the sides and also perused the relevant material on record. The ld. Counsel for the assessee has furnished before us the details of transactions in shares made by the assessee in the year under consideration as well as in the immediately preceding year i.e. A.Y. 2006-07 to show that the nature of transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in shares and the rule of consistency should be followed when facts and circumstances for different years are identical, particularly in the case of same assessee. In our opinion, the ratio of the decision of the Hon ble Bombay High Court in the case of Gopal Purohit(supra) is squarely applicable in the facts and circumstances of the present case and respectfully following the same, we direct the Assessing Officer to accept the claim of the assessee for Short Term Capital Gain of ₹ 6,13,016/- on sale of shares. Ground no.1 of the assessee s appeal is accordingly allowed. 8. Ground no.2 raised by the assessee in this appeal relating to the disallowance of ₹ 93,638/- made by the AO and confirmed by the ld. CIT(A) u/s-14A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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