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2016 (3) TMI 247 - BOMBAY HIGH COURT

2016 (3) TMI 247 - BOMBAY HIGH COURT - TMI - Short term capital gain v/s business income - transaction of shares - Held that:- All the authorities under the Act have on consideration of facts and in particular the statement of short term capital gain which was annexed to the return of income by the Appellant and also annexed as Exh.A-1 to the Appeal Memo rendered a finding of fact that the profit claimed to be on account of purchase and sale of investment in shares was in fact on account of trad .....

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-2-2016 - M. S. Sanklecha And B. P. Colabawalla, JJ. For the Appellant : Mr P.J. Pardiwalla, Sr. Counsel with Ms Aasifa Khan For the Respondents : Mr A.R. Malhotra with Mr N.A. Kazi ORDER P. C. 1. This Appeal filed under section 260A of the Income Tax Act 1961 (the Act) takes exception to the order dated 30th August 2013 passed by the Income Tax Appellate Tribunal (Tribunal). The impugned order relates to AY 2008-09. 2. Mr Pardiwalla, learned Sr. Counsel for the Appellant urges only the followin .....

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fit in trading of shares at ₹ 7.75 lakhs and short term capital gain at ₹ 77.85 lakhs. This distinction between capital gains on account of investment and gains on trading account in respect of shares in same companies was made on the basis that wherever the holding of shares was in excess of one day, it fell for classification as capital gains on account of investment. The Assessing Officer, in his order dated 15th November 2010 held that the amount shown as short term capital gains .....

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s of the assessee. It is a matter of fact whether a person is dealing in shares as trader or as investor. For this purpose all the relevant facts have to be considered. The relevant facts in such cases are the nature to purchase, entry in books of account, frequency of transactions, period of holding volume of transactions, nature of funds, whether borrowed or own capital, other activities of the assessee etc. In the case of the assessee motive is claimed to be investment but it is not reflected .....

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the holdings are for less than two months. At the same time, the volume of transactions is also high which is in many cases 50,000 shares or more, which shows that assessee does not intend to hold them as investment. In share trading A/c. assessee has not shown anything held for more than one day. Therefore, from the facts and circumstances of the case it clearly appears that assessee is trading in shares but the shares where the holding period is less than one day are shown on account of tradin .....

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by the Central Board of Direct Taxes, observed that there are various factors such as frequency, volume, entry in the books of accounts, nature of funds used, holding period etc. which are relevant in deciding the true nature of transactions and no single factor is conclusive. Thus, mere non-introduction of interest bearing funds will not alone determine the nature of the transactions. The impugned order, after analyzing the statement of capital gains which were available before it, came to the .....

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