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2015 (7) TMI 286

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..... and sale of same script manifest the intention of the assessee to book the profit on every swing of the stock market and then again entered into the same script to re-book the profit on the next swing. Thus the assessee is running with the movement of the stock market. Therefore, the facts and circumstances of the case clearly show that assessee was doing the transactions of trading in shares. The assessee contended that the AO accepted the investment in the earlier, therefore, cannot take a different view for the year under consideration. It is pertinent to note that rule of consistency is applied only when the facts are identical and not distinguishable. In the year under consideration the assessee has carried out repetitive transactions in the same script as well as same day transactions of purchase and sale therefore, the earlier orders would not operate as res-judicata or applied as rule of consistency. Hence, we do not find any error or illegality in the impugned order of the CIT(A) confirming the income as business income - Decided against assessee. - ITA No. 3299/Mum/2012 - - - Dated:- 2-1-2015 - Vijay Pal Rao, JM And B R Baskaran, AM ,JJ. For the Appellant : S .....

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..... the activity of purchase and sale of shares as investor has been carried on under the investment portfolio. The assessee has borrowed fund and claimed payment of interest and other expenses as deduction against the business income. The activity of delivery based purchase and sale in the shares indicated intention of the assessee as investment in shares and therefore the income from the said activity was offered as capital gain as opposed to be nondelivery bases purchase and sale of shares as business income. It is vehemently contended that assessee has two portfolios and income from investment portfolio should be treated as capital gain. In support of his contention the assessee has relied upon the CBDT circular no. 4/2007 dated 15th June 2007 as well as decision by this Tribunal in case of Gopal Purohit v. Jt. CIT (2009) 29 SOT 117 (Mumbai) which has been upheld by the Jurisdictional High Court 336 ITR 287. The concepts of two separate portfolios have been repeatedly upheld of this tribunal in various decisions. It is further contended that the assessee has taken loan from ICICI Bank for trading in shares as overdraft account and not used borrowed fund for the purpose of investme .....

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..... f shares on delivery basis. The assessee claimed the surplus from purchase and sale on delivery based transactions as short term capital gain on the reasoning that the assessee is maintaining two portfolios one for investment and other for derivatives business. There is no quarrel on the point that the assessee can have two separate portfolios but maintaining separate portfolios would not epso facto establish the fact that the transactions shown in the investment portfolios are in fact in the nature of investments and not trading. The purpose and intention of investment is to own the property for longer period so as to get the value appreciation. The motive of investment is primarily appreciation in value of the property in due course of time and not to earn profit at the earliest possible opportunity. 7. In the case in hand the details of period furnished by the assessee as under; Period of Holdings Number of Transaction 1-30 42 31-90 25 91-180 8 Total 75 The above details clea .....

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..... and dividend. (ii)that the funds of ₹ 25,00,000/- received as deposit from tenant claimed by the appellant to have been used for the purchase of shares, are not sufficient for carrying out the activity of purchase and sales of the shares to such extent. (iii) That the frequency and volume of the transaction is very huge in the case of the appellant. (iv) That the appellant has carried out an organized activity of purchase and sales of the shares with a clear cut intention to earn profit from the market fluctuation. 8. Thus, it is clear that the overall holding period of the shares ranges from 4days to 4 months. The volume of purchase and sale is almost equal which shows that the intention of the assessee is not to retain the shares but disposed off at the earliest possible time. Further the assessee is having OD facility with ICICI Bank. The outstanding liability at the end of the year in the OD account is ₹ 2.59 crores. The own fund claimed by the assessee is nothing but deposit received from the tenant therefore it was not his own fund but was to be refunded to the tenant. One more important feature of the transactions is repetitive purchases and sale in .....

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..... 25-Jan-05 21-Apr-05 92 279197 245076 34121 Glenmark Pharma 2,000 05-Sep-05 21-Sep-05 16 610361 592912 17449 Helios Math 750 19-Sep-05 22-Sep-05 3 288073 330963 -42890 Helios Math 2,500 08-Nov-05 22-Mar-06 134 465981 498956 -32974 Hind Oil Exploration Co. 3,000 21-Apr-05 27-Apr-05 6 426402 426924 -522 Hind Oil Exploration Co. 3,000 22-Apr-05 27-Apr-05 5 426402 451000 -24599 Hind Oil Exploration Co. 3,000 14-Nov-05 .....

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