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ACIT, Circle-3, Surat Versus Shri Rajendrabhai

2015 (12) TMI 759 - ITAT AHMEDABAD

Profits from shares - CIT(A)’s directing AO to treat his share profits as business income in case of shares held for less than 30 days and capital gains heaving holding period more than that - Held that:- It transpires that the Commissioner of Income Tax(A) has followed the tribunal’s order in deceased assessee’s own case relating to preceding assessment years in directing the Assessing Officer to treat profits arising from shares held less than 30 days only as business income and exceeding the .....

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- Decided against revenue - ITA No. 1937/Ahd/2011 - Dated:- 26-8-2015 - Shri G. D. Agrawal, Vice President and Shri S. S. Godara, Judicial Member For The Revenue : Shri Vilas Shinde, Sr. D.R. For The Assessee : None ORDER PER : S. S. GODARA, JUDICIAL MEMBER:- This Revenue s appeal for A.Y. 2008-09, arises from order of the CIT(A)-II, Surat dated 31-05-2011 in appeal no. CAS-II/178/2010- 11/79, in proceedings under section 143(3) of the Income Tax Act, 1961; in short the Act . 2. The Revenue s so .....

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n a narrow compass. The respondent herein is a legal representative of the deceased assesse Shri. Sugamchand Chimanlal Shah. The said assessee was engaged in the business of trading in shares and securities. He declared the impugned long and short term capital gains. The Assessing Officer in assessment order dated 03-12-2010 rejected his explanation in tune with his orders passed in preceding assessment years and treated the above stated capital gains as business income. 4. The assessee filed ap .....

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A.Y. 2006-07, as business income, has been decided by the ITAT, wherein long term capital gain has been held taxable under the head of 'long term capital gain' and the short term capital gain has been held to be divided into two parts, first where short term gain is from sale of shares held for a period of less than 30 days, which is to be taxed as 'business profit', and, second where short term capital gain is from sale of shares held for a period of 30 days or more, but less th .....

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c of short term capital gain as business income of the appellant. The second ground of appeal is against disallowance ₹ 4,24, 252/- from expenses under the head salary, telephone and vehicle, made on the ground that in the P & L account, the appellant has credited long term capital gain of ₹ 1.06 crore and dividend of ₹ 20,00,000/- has been claimed exempt u/s. 14A of the Act, therefore, expenses relating to the exempt income is not allowable, especially salary which is main .....

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77; 1,86,88,639/- on account of capital gain treated as business income: 2. During the year under consideration, assessee has shown short term capital gain on sale of shares of ₹ 79,92,480/- and long term capital gain on sale of shares of ₹ 1,06,96,159/-.The assessee was required to submit the explanation as to why the same should not be treated as business profit. Assessee vide letter dated 18.11.2010 filed a reply, the relevant portion of which is reproduced at para no. 4 of the as .....

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l gains as business income. It is pertinent to point out at the outset that the issue involved for the year under consideration stands covered by the decision of Honourable ITAT dated 29/01/2010 in assessee's own case for immediately two preceding years. It may be noted that similar issue also arose in the immediately three preceding assessment years viz. A.Y 2.005-06, 2006-07 & 2007-08 & in the said three years; the income from capital gains shown by assessee was treated as business .....

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has been decided by above referred order. In the said order, the Honourable ITAT has discussed the issue at length & the decision of learned CIT(A) as regards income from long term capital gains was upheld and as regards the income from short term capital gains shown by assessee, the Honourable ITAT held that where shares are held for less than a month, gain on them should be treated as profit from business and where shares are held for more than a month, they should be treated as investment .....

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urse of assessment proceedings vide letter dated 18/11/2010 which is reproduced in para 4 of assessment order & also in view of detailed submissions made in appellate proceedings for the immediately preceding three years, the action of assessing officer in treating the income from capital gains as business income may kindly be deleted. Your honour is therefore requested to kindly accept the plea of assessee. x x x x x x x x x x x x x x x x x x 4. Decision 4.1 I have duly considered the above .....

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