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TMI Blog2015 (8) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... ,09,990/- from sale of shares. However, AO treated these long terms and short-term capital gain disclosed by the assessee as her business income. For this, firstly AO analysed the Instruction no 1827 dated 31.08.1989, circular No. 4/2007 dated 15/6/2007 and then tested the facts of the case of the assessee on ten test such as usual trade or business of the assessee; nature, quantity, scale of the purchases and sales; motive test, characterisation in books of accounts; time devoted by assessee; holding period of securities etc. After considering the submission of the assessee on these tests, the AO held that the income from purchase and sale of shares was liable to be assessed as business income. 3. Aggrieved by the order of AO, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain without examining whether the facts were similar or whether the departments' stand in earlier year was correct. 4. The Learned DR submitted that there are numerous transactions in various companies and at frequent intervals that has resulted in the long term and short-term capital gain. Further holding period in some of the transactions is also very short. Investments made by the assessee are also in number of companies. The 25 % of the income of the assessee is under other heads other than capital gains meaning thereby that 75% of the income of the assessee is from share trading activities. Assessee has dealt with in more than 40 companies for having capital gains. He also submitted that some of the transactions have resulted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal has decided the issue in favour of the assessee. He submitted in paper book details of capital gain earned by the assessee showing the name of the scripts and gain earned on that day wise holding of the shares sold and quantity of shares sold. He further submitted that dividend earned in AY 2008-09 is Rs. 40.16 lakhs compared to Rs. 19.48 lakhs in A Y 2006-07. Average period of holding in the current year is 547 days compared to 229 days in AY 2006-07. He also submitted that maximum period of holding has also increased and there is no borrowings made by the assessee for investments in shares. He further pointed out that the assessee had earned substantial dividend income not only in this year but for the earlier assessment year also. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82,268 Total 4,15,10,141 The average period of holding of shares, which was sold, is 229 days. 71% of the profits are as shares held for more than 365 days. 81% of the profits are on shares held for than 6 months. A perusal of Annexure A-1 to the assessment order shows that in very few cases the transactions have taken place on a single day. The assessee claimed that this was due to a mistake committed while purchasing shares. Otherwise, a perusal of Annexure A-1 shows that the assessee in number of cases, which are listed in the last four pages of the Annexure, has held shares for more than 300 days. In fact the shares of LIC Housing Finance were held for more than 1000 days. In certain cases the holding period was 1400 days. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number of decisions have been relied upon by the parties in this case, the settled law is that there can be no single test which can be applied to find out whether a person has investment in shares or doing business in shares. Each case depends on the facts of each case. The intention of the person has to be gathered from the facts and circumstances of the case and if the intention is to trade or do business in shares, the income is assessable under the head "Profits and Gains" from business and if the intention is to invest in shares, the income or gains is assessable under the head "Capital Gains". 12. In the case on hand, we uphold the finding of fact given by the first appellate authority, based on the period of holding, the income de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee are extracted below for ready reference: Holding period in days A Y 2006-07 A Y 2008-09 0-30 3888101 77508 31-90 3841807 1058724 91 -180 1191155 887173 181-365 3907610 2286582 Above 365 days 29682268 12818782 This also shows that compared to AY 2006-07 out of total capital gain of Rs. 17128729/- assessee has earned Rs. 12817782/- as long-term capital gain, which is almost 75 %, compared to the total gain earned by assessee in AY 2006-07 of 71%. 9. The Decision of ITAT in case of Gopal Purohit in 122 TTJ 87( Mum) has been upheld by the Hon'ble Bombay High Court reported in 34 DTR (Bom) 52 holding that there should be consistency in the stand for subsequent years unless the facts of the other year are different. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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