9911796707
TMI Blog2014 (8) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2005-06, filed original return on 30th October, 2005, declaring income of Rs. 1,46,09,330/-. The assessment order records that the respondent-assessee was a share broker registered with the National Stock Exchange and Bombay Stock Exchange and engaged in business of sale and purchase of shares. The respondent-assessee had declared short-term capital gain of Rs. 82,32,316/- from sale and purchase of shares. After referring to Circular No.4/2007 dated 15th June, 2007 and judgment of Supreme Court in the case of CIT (Central), Calcutta Vs. Associated Industrial Development Company (P) Ltd. (1971) 82 ITR 536 (SC) and some other decisions, the Assessing Officer had held that profit from sale and purchase of shares should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hree transactions were for purchase of shares of State Bank of India. Similarly, there were two transactions for sale of shares of NTPC and Dena Bank and two transactions for sale of shares of State Bank of India. We also notice that the appellant had shown "business income" of Rs. 63.77 crores, which was in addition to the short-term capital gain of Rs. 82,32,316/- from sale of shares. 6. The respondent-assessee had submitted that their total turnover was Rs. 4697.23 crores, as against investment in shares of Rs. 2.95 crores. In the previous assessment years they were maintaining dual portfolio of investment (capital asset) and stock-in-trade (trading asset). The gains from investment were shown as "short-term capital gains", whereas the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per Board resolution dated 12th October, 2004 and shares of State Bank of India on different dates from secondary market. The shares of Dena Bank has been purchases by making application in public offer as per Board"s resolution. The acquisition of these shares in the investment register has been shown out of surplus funds. These shares were credited in Demat account and have been sold during the year except 25,000 shares of NTPC. Therefore, from the Board resolutions and entries in the books of accounts it is proved that these shares were held as investments and not as stock-in-trade. The assessee had also received dividend from the shares which were held as stock-in-trade. Merely because the dividend has not been received from shares held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he stock exchanges and as a result of carrying on trade in shares. The shares held as investment were kept in a separate portfolio. The said shares related to only three companies. Shares of Dena Bank and NTPC were purchased in the initial public offer as has been recorded in paragraph 6 above. This was the stand of the respondent-assessee before the lower authorities. 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. 9. In view of the facts stated above, we do not think that the order passed by the Tribunal requires any interference. The question of law is accordingly answered in favour of the respondent- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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