TMI Blog2014 (8) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... nt will be assessable under the head “short term capital gains” and not as “business income” - The shares held as investment were kept in a separate portfolio – the shares related to only three companies - Shares of State Bank of India were also purchased and kept in the investment portfolio account and not treated as stock in trade - These shares were sold after a gap of 4 months or more – Decided against Revenue. - ITA 1241/2011 - - - Dated:- 6-8-2014 - Sanjiv Khanna And V. Kameswar Rao,JJ. For the Appellant : Mr. Ruchir Bhatia, Jr. Standing Counsel. For the Respondent : Mr. S. Krishnan, Advocate. ORDER Sanjiv Khanna, J. (Oral) This appeal by the Revenue, which pertains to assessment year 2005-06, in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not earned any dividend. The Assessing Officer has in a chart reproduced details of sale and purchase of shares subject matter of short term capital gains. The chart reads:- The Assessing Officer highlighted that the period of holding was between 15 days to about 5 months. The Assessing Officer contradicted himself and accepted that dividend had been received on account of shares of NTPC, which had not been sold till 31st March, 2005. He emphasised that no dividend was received on shares, which were sold before the said date. 4. Commissioner of Income Tax (Appeals) decided the issue in favour of the Revenue and confirmed the said addition for similar reasons given by the Assessing Officer. He observed that the holding per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had filed minutes of the meeting of Board of Directors of the CNB Finwiz Ltd. held on 12th October, 2004 and 19th October, 2004. In meeting dated 12th October, 2004 it was resolved that an application for purchase of 20,25,000 shares at the rate of ₹ 62/- in the Initial Public Offer of equity shares of NTPC should be made for the purpose of investment. Shri Chand Rattan Bagri, the Director of the company was authorized for applying for shares of NTPC by opening depository account in the name of IL FS services. In Board meeting dated 19th October, 2004 it was resolved that equity shares of State Bank of India may be purchased from secondary market for a sum not exceeding ₹ 1,50,00,000/- for the purpose of investment. Again as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of Hon ble Bombay High Court in the case of Gopal Purohit Vs. JCIT (supra). In view of the above discussion, it is held that the profits earned on sale of shares held as investment will be assessable under the head short term capital gains and not as business income . We, therefore, decide this issue in favour of the assessee. 8. It is clear from the aforesaid finding that the respondent-assessee, though a member of Bombay Stock Exchange and National Stock Exchange, had maintained two portfolios. One relating to investments and other relating to stock-in-trade. Profits and losses from investments were shown as capital gains either long-term or short-term and profits and losses from stock-in-trade were shown as busine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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