TMI Blog2013 (2) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,446/- as the business income of the appellant. The appellant prays that short term capital gain should not be treated as business income. 2. The income arising to the assessee out of sale and purchase of shares amounting to ₹ 75,07,446/- has been treated as business income against the claim of the assessee that the same is short term capital gain. The AO observed that the assessee has traded in 30 different scrips and period of holding varies from 1 to 9 days. The total value of shares purchased and sold are ₹ 4,84,35,456/- and ₹ 5,59,42,902/- respectively of which the assessee has derived profit of ₹ 75,07,446/-. Therefore, the prime intention of the assessee was to trade in shares and not to trade them as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rips and motive behind purchase will be relevant to decide that whether or not assessee carries on business in shares. 3. The addition was agitated in appeal before Ld. CIT(A). It was submitted that the investment in shares is shown under the head investment. With respect to all the shares transactions, the assessee had taken / given delivery of shares through her D-Mat account. Only 30 scrips have been dealt in by the assessee for which there are no frequent sale or purchases. There is only one transaction per scrip. None of the scrip was repurchased after it was sold. The nature of transaction is more relevant than the magnitude of transaction. Out of 30 scrips, 18 scrips were purchased through IPOs. There is no single transaction wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which also interest is paid. Considering all the facts and circumstances of the case Ld. CIT(A) has upheld the action of AO on the ground that magnitude and frequency of the transaction is high and period of holding is low. He observed that the principle of res-judicata is not applicable to income tax proceedings. The assessee was engaged in the activity of trading in shares. Therefore, the AO was right in assessing the income arising there from as business income. 5. The assessee is aggrieved, hence, has raised aforementioned ground of appeal. 6. After narrating the facts the first argument raised by Ld. AR was regarding consistency. He submitted that for earlier two years i.e. for A.Y 2005-06 and 2006-07 the assessment have been f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years were identical particularly in the case of the same assessee and the entries in the books of accounts alone are not conclusive in determining the nature of income. He also relied upon the decision of Mumbai Tribunal in the case of Nagindas P. Sheth (HUF) in ITA No.961/Mum/2010 order dated 5/4/2011, wherein it was found by the Tribunal that for A.Y 2007-08 i.e. in subsequent year the AO had accepted the share transactions of the assessee in the nature of investment, therefore, even if assessee had transacted into 158 shares it was not considered to be the sole criteria to conclude that assessee was trader in the shares. A copy of the order was filed before us and copy was also given to Ld. DR. 6. Coming to merits it was submitted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by assessee from sale and purchase of shares has rightly been held to be income assessable under the head income from business or profession He pleaded that order of Ld. CIT(A) should be upheld. 8. We have carefully considered the rival submissions in the light of material placed before us. It has been demonstrated by Ld. AR that assessee has mainly dealt in only 10 scrips as in other 20 scrips the investment by the assessee is less than ₹ 25,000/-. The main investment of the assessee was in the shares of Power Grid Corporation which was purchased by the assessee on 13/9/2007 and in the month of November they were sold on which the assessee has earned profit of ₹ 1.18 crores. The period of holding such scrip is 69,71 and 74 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,07,473/-. There also the period of holding ranged between 1 to 147 days. In both the years the department has accepted the claim of the assessee that activity of sale and purchase entered into by the assessee is an activity giving rise to capital gain. For subsequent years also i.e. A.Y 2007-08 the assessee has declared short term capital gain of ₹ 8,48,176/- dealing in 19 scrips where holding period is between 3 to 363 days. The assessee had purchased shares for an aggregate sum of ₹ 1,05,02,162/- and sold the same for ₹ 1,13,40,081/-. Thus assessee is consistent in investing in the shares and such activity of the assessee remains the same for the year under consideration. There is no material difference in the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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