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TMI Blog2014 (12) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the business income of Rs. 18,58,332/- as Short Term Capital Gain. As grievance of the assessee and the Revenue relate to the same set of facts, both the appeals were heard together and are disposed of by the common order for the sake of convenience and brevity. 3. The return for the year was filed on 22.7.2008 declaring total income at Rs. 29,39,900/-. The return was selected for scrutiny assessment. During the course of the scrutiny assessment proceedings, the Assessing Officer observed that the assessee has shown Short Term Capital Gains at Rs. 24,82,027/-, Long Term Capital Gain of Rs. 10,11,024/-, Speculation profit of Rs. 5,12,135/- and Income from Other Sources of Rs. 51,817/-. 3.1. The AO sought explanation from the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the income offered from capital gains on sale of shares was accepted in the earlier years in the assessment orders made u/s. 143(3) of the Act. The ld. CIT(A) further observed that the assessee was holding 147 scrips as investment since 1.4.2003. Further, the number of scrips held/purchased/sold during the years 2004-05 to 2010-11 remained around 100 to 150 which means that a substantial portion of the purchases was always retained at the end of the year. The Ld. CIT(A) finally concluded by holding that Short Term Capital Gain earned during a very short holding period of 1 to 7 days should be treated as business income and accordingly directed the AO to treat the sum of Rs. 6,23,695/- only as business income and the balance to be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has been settled by actual delivery of shares and the money is actually paid and received in each and every case, whereas in case of a trader, ordinarily the transactions are settled without actual delivery. The purchase and sale transactions are settled only by way of receipt/payment of net difference. This is not the case of the assessee as no such findings have been given by the AO. The Long Term Capital Gains have been accepted by the AO. If the AO was of the firm belief that the assessee is engaged in trading activity in the shares, then it should not make any difference if the shares are held for more than 12 months or less than 12 months, but here is a case where the AO has accepted the assessee is an investor so far as Long T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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