Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

DCIT, Circle-15 (1) , New Delhi Versus Rajasthan Global Securities Ltd.

Sale of shares of Satyam Computers - 'Short-term capital gain' OR 'Business income' - Held that:- It is an undisputed fact that the assessee took delivery of such shares after making full payment and it was not a case of settling the transaction of purchase and sale of such shares during the settlement period itself. This is another reason to indicate that the intention of the assessee to hold them as Investment.

Also the assessee was consistently holding some other shares as investme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tment of profit from sale of shares held as investment has not been disputed by the AO in the assessments made u/s 143(3) of the Act. The assessee has placed on record a copy of the assessment orders for immediately preceding assessment year in which there was 'Short-term capital gain' of ₹ 17.21 crore which has been accepted by the AO vide his order dated 29.12.2011. Similarly, there is an order passed u/s 143(3) for assessment year 2006-07 accepting that the assessee was engaged in the b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cided against Revenue. - ITA No. 106/Del/2014 - Dated:- 11-3-2015 - R. S. Syal, AM And A. T. Varkey, JM,JJ. For the Petitioner : Shri Kapil Goel, Adv. For the Respondent : Shri Vikram Sahay, Sr. DR ORDER Per R. S. Syal,AM. This appeal by the Revenue is directed against the order passed by the CIT(A) on 11.10.2013 in relation to the assessment year 2010-11. 2. The only issue raised is against treating the profit of ₹ 15,91,05,689/- arising from sale of shares of Satyam Computers as 'Sho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The AO observed that the assessee purchased 70,44,801 shares of Satyam Computers during the period 9.4.2009 to 3.6.2009 and such shares were sold in entirety during the period June,2009 to January, 2010 for a consideration of ₹ 51.18 crore, realizing a profit of ₹ 16.41 crore, on which security transaction tax (STT) was paid to the tune of ₹ 6,39,749/-. On being called upon to explain as to why profit from sale of such shares be not considered as 'Business income' as ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the intention of keeping them for a fairly reasonable period of time. These were purchased in huge quantities. The assessee also stated that it traded in almost 100 scrips in the capital market segment and out of these only one scrip was purchased and sold during the year which was classified as Investment and profit there from was taken as 'Short-term capital gain.' The reason for treating profit from sale of such scrips as Capital gain was given as the initial intention of the assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rocess to select an investor through open auction and on 13.4.2009, Tech Mahindra won the bid for acquiring 51% stake in Satyam Computers @ ₹ 58 per share and, hence, made an open offer to all Satyam shareholders at this rate. He, therefore, held that the object of the assessee was not to stay invested in these shares and earn dividend, but, to realize immediate profit on increase in the price of such shares. Considering this and other reasons, the AO treated the profit of ₹ 16.41 cr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y decision to hold shares as 'Investment' or 'Stock-in-trade' depends on a host of factors. There can be no single criteria to decide the nature of shares purchased. In fact, it is the cumulative effect of all the relevant factors, which is taken into consideration for reaching a conclusion as regards the nature of shares and the resultant income arising from their transfer. There may be some factors indicating the purchase of shares as investment, while others may point towards .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom 9th April, 2009 and continued to do so till 3rd June, 2009. The matching of purchase dates close to 13.4.2009 were claimed to be indicative of the assessee's intention to reap the immediate profit on their sale. The argument of the ld. DR that the assessee entered into such shares at a time when they were at the lowest price and hence there could be no possibility of making Investment, cannot be considered as decisive for holding such shares as stock-in-trade. A person may think of makin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee paid STT at the time of sale of such shares. This Annexure indicates that the assessee firstly purchased all the shares of Satyam Computers over a period of time and, thereafter, started their disposal. In other words, there is no frequent in and out of these shares. 7. It is manifest from page 10 of the impugned order that the assessee had the initial intention to hold these shares as 'Investment' which is discernible from the fact that these were entered into the 'Investment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

troverted on behalf of the Revenue by any cogent material. 9. Apart from that, it is an undisputed fact that the assessee took delivery of such shares after making full payment and it was not a case of settling the transaction of purchase and sale of such shares during the settlement period itself. This is another reason to indicate that the intention of the assessee to hold them as Investment. 10. Another factor which needs to be mentioned is that the assessee was consistently holding some othe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version