TMI Blog2016 (3) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares in which the period of holding ranged between 1-356 days but that in itself is not enough to treat the income from sale of shares as income from the business contrary to what had been shown by the assessee. Decide the issue in favour of the assessee and direct the AO to treat the income from sale of shares as short term capital gain and not as business income - Decided against revenue - I.T.A. No 7040/Mum/2012 - - - Dated:- 5-2-2016 - SHRI C.N. PRASAD, JM AND SHRI RAJESH KUMAR, AM For The Appellant by : Shri Reepal Tralshawala For The Respondent : Shri R.A. Dhyani ORDER PER RAJESH KUMAR, A. M: This appeal by the assessee is directed against the order dated 06.08.2012 of Commissioner of Income Tax (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O framed the assessment at ₹ 31,71,300/- while treating short term capital gain of ₹ 7,79,403/- and long term capital gain of ₹ 6,29,952/- from sale of shares by treating the same as business income of the assessee vide order dated 24/12/10. 5. The assessee aggrieved by the order of the AO preferred an appeal before the CIT(A) who while deleting the addition in respect of long term capital gain of ₹ 6,29,952/- sustained the addition of short term capital gain of ₹ 7,79,403/- by holding that the income from long term capital gain could be treated as income from investment as investment were held more than 1 year by the assessee while upholding the order of the AO of treating the short term capital gain as bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res which have been held for a period of time. However, the single activity of the assessee cannot be compartmentalized and it is the overall impression which will decide whether the assessee is an investor or a trader. Since the intention of the assesee was not to hold the shares for a longer period to earn income from appreciation in the value of shares as is evident from the facts available on record, and the conduct of the assessee shows that she has acted as a trader in respect of the shares in question, she has to be held as a trader and not as an investor in respect of the shares on which short term capital gains has been claimed by the assessee. The action of the Assessing Officer of treating the gains of ₹ 7,79,403/- as busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 154-161 of the paper book. The ld. Counsel relied on the some decisions of the Tribunal in defence of the assessee namely:- 1. Shri Mahendra C Shah, Mumbai vs. ACIT in ITA No. 6289/Mum/2008 (A.Y. 2005-06) dated 18/05/2011. 2. Mr. Hitesh Satishchandra Doshi, Etemia vs, The Jt. CIT in ITA No. 6497/Mum/2009 (A.Y. 2003-04) dated 15/06/2011 and others. The ld. Counsel finally submitted that in order to ascertain whether income from sale of shares falls under business income or short term capital gain, is to be determined on the conduct of the assessee and not otherwise and finally prayed that the order of CIT(A) be set aside and AO be directed to treat income from sale of shares as short term capital gain as returned by the assessee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Doshi, Etemia vs. The Jt. CIT in ITA NO. 6497/Mum/09 (A.Y. 2003-04) dated 15/06/2011 and others, co-ordinate bench have decided the similar issue in favour of the assessee. The relevant para no. 10 of ITA No. 6497/Mum/09 and others is extracted as under: The Hon ble Supreme Court in the case of CIT vs Associated Industrial Development Co P Ltd reported in 82 ITR 586 as well as in the case o CIT vs. H Holsck Larzen reported in 160 ITR 67 has laid down various principles, which has been considered by the CBDT for issuing the circular no. 4/2007 dated 15.6.2007. In short, the principles laid down in those cases for deciding the question of nature of the transaction as trading or investment, mainly/broadly are:- what is the intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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