TMI Blog2014 (10) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of assessee. - I.T.A. No.5007/Mum/2013, I.T.A. No.5416/Mum/2013 - - - Dated:- 17-9-2014 - Shri B. R. Baskaran (AM) And Vivek Varma, (JM),JJ. For the Appellant : Shri R C Jain For the Respondent : Shri Pitambar Das ORDER Per B. R. Baskaran, Accountant Member: These cross appeals are directed against the order dated 28-05-2013 passed by Ld CIT(A)-32, Mumbai and they relate to the assessment year 2010- 11. 2. The issue urged by the assessee relates to the assessment of Short term Capital gain arising on sale of shares as Business income . The issue urged by the revenue relates to the assessment of Long term Capital Gains as Business income , i.e., whether the Ld CIT(A) was justified in holding that the Long Term Capital gain is not assessable as Business income. 3. The facts relating to the above said issues are stated in brief. The assessee filed her return of income declaring Long term Capital gain of ₹ 2,52,69,254/- and Short term Capital gain of ₹ 47,82,664/-, both arising on sale of Shares. The assessee claimed the Long term Capital gain as exempt u/s 10(38) of the Act and paid the tax on Short term Capital gain at conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Deepaben A Shah (99 ITD 219) 5. The Ld D.R further submitted that the Ld CIT(A) also confirmed the view taken by the assessing officer in respect of Short term Capital gain by placing reliance on the principles discussed in the following case law:- a) Raja Bahadur Wisheshwara Singh 41 ITR 685(SC) b) V. Nagesh (ITA No.5410/Mum/2008) c) G.Venkatasami Naidu Co. (35 ITR 584)(SC) d) PM Mohd Mirza Khan (73 ITR 735)(SC) e) Suresh R Shah (258 CTR (Bom) 356) f) Sugandh P Shah 37 DTR 345)(And)(Trib) The Ld D.R further placed reliance on the decision rendered by Mumbai D bench of Tribunal in the case of Devji Nenshi Palani Vs. ITO (2012)(28 taxmann.com 209); Mumbai I bench decision rendered in the case of Smt. Sadhana Nabera (ITA No.2586/Mum/2009); and also the decisions rendered by the Co-ordinate benches in the case of Harshad Mehta (6 taxman 75) and Rakesh Sanghvi (7 taxmann.com 40). 6. The Ld D.R further submitted that the Ld CIT(A), after having held that the assessee was carrying on purchase and sale of transactions with business/profit motive, should not have held that the Long term Capital gains is not assessable as business income. The Ld D.R submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he taxation of Capital gains. He submitted that the intention of the assessee at the time purchase of shares is the main determining factor in this kind of cases. The Ld A.R submitted that the assessee was having intention to act as Investor only from the very beginning. The Ld A.R placed reliance on the following case law:- a) DCIT Vs. E-Cap Partners (2014)(45 taxmann.com 342)(Mumb Trib) b) Late Lalchand Siraldas Rohra Vs. DCIT (ITA No.422/M/2011) c) M/s Karodia Construction P Ltd Vs. DCIT (ITA No.1074/Mum/2011) The Ld A.R also relied upon various other case law discussed by him in the Compilation of Circular decisions. 8. We have heard the rival contentions and perused the record. The undisputed facts are that the assessee is a house wife and she has carried out the purchase and sale of transactions in the past years also. In assessment years 2007-08 and 2008-09, the assessments were completed by accepting the activity of the assessee as Investment activity. In these two years, the assessee has incurred Long term Capital loss and only in this year, the assessee has incurred net Short term Capital gain of ₹ 47.82 lakhs and Long term Capital gain of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term Capital gains 47,82,664 Long term Capital gains 2,52,69,254 3,00 ,51,918 A careful analysis of the profit earned by the assessee would show that the assessee has generated 80% of the profit from Long term Capital gains and only less than 20% of profit is earned from Short term trading activity. 12. The assessee has dealt in 61 types of shares, out of which the repetitive transactions, purchase-sales-purchase, are seen only in two scrips viz., in Altalnta shares (Sl. No.3) and Billpower (sl.No.9). In the balance 59 shares, the assessee has only purchased the shares in one or more trench and sold them subsequently in one or more trench. Hence, in our view, the assessee cannot be held to have indulged in repetitive transactions in the facts and circumstances of the case. Though the AO has pointed out that the total number of transactions entered during the year under consideration were about 300, a perusal of relevant statement placed from page 33 would show that they were not continuous transactions in respect of a particular share. What the assessee appears to have d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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