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Anjana Devi Agarwal Versus Assistant Commissioner of Income Tax

Profit on sale of shares - chargeable to tax under the head "capital gains" or "profits and gains from the business or profession" - Held that:- A perusal of the relevant balance-sheet of the assessee also shows that the investment in shares was made by the assessee out of her own funds and the only source of income of the assessee for the year under consideration was interest from small savings as well as loan given to one Company. There is nothing in the relevant financial statements filed by .....

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s issue and direct the Assessing Officer to bring to tax the profit of the assessee from sale of shares in her hands as short term capital gain. - Decided in favour of assessee - ITA No. 1400/Kol/2013 - Dated:- 10-2-2016 - P. M. Jagtap, AM For the Appellant : Shri R M Jain, Adv For the Respondent : Shri Tanuj Niyogi, JCIT, Sr DR ORDER This appeal is preferred by the assessee against the order of ld. Commissioner of Income Tax (Appeals), Asansol dated 18.03.2013 for the assessment year 2005-06 an .....

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turn, profit from the sale of shares amounting to ₹ 11,54,913/- was declared by the assessee as short-term capital gain liable to tax at a concessional rate of 10%. During the course of assessment proceedings, the relevant transactions giving rise to the said profit were examined by the Assessing Officer and on such examination, he found that a particular modus operandi was followed by the assessee, which resulted in unprecedented profit in the transactions of shares in connivance with som .....

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;income from other sources". Without prejudice to this conclusion drawn by him, the Assessing Officer also held that the relevant shares having been purchased by the assessee with the sole intention of selling the same for profit and not to hold the same to enjoy income thereon for sometimes, the profit arising from sale of such shares was chargeable to tax in the hands of the assessee as business income and not capital gains. In the assessment completed under section 143(3) vide an order d .....

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order of assessment, the ld. CIT(Appeals) held that the general modus operandi adopted by the assessee in respect of share transactions as explained by the Assessing Officer was only a supporting material. He, therefore, disregarded the same and focussed only on the core issue as to whether the income of the assessee from share transactions was chargeable to tax in her hands as business income or short-term capital gains. In this regard, he recorded his findings/ observations as under:- (i) Ther .....

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ion of the assessee behind purchase of shares was to sale the same for profit and not to retain for some periods in order to earn dividend. 4. On the basis of the above findings/observations recorded by him, the ld. CIT(Appeals) held that the profit arising from the relevant transactions in shares was chargeable to tax in the hands of the assessee as business income and not short-term capital gains. Accordingly, the order of the Assessing Officer on this issue was upheld by him. Aggrieved by the .....

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of shares giving rise to the income of the assessee were accommodation entries, and therefore, the entire sale proceeds of shares were liable to be taxed in the hands of the assessee under the head "income from other sources", were not finally relied upon by the Assessing Officer himself as only the net profit was brought to tax by him in the hands of the assessee in the assessment and that too under the head "profits and gains of business or profession". The ld. CIT(Appeals .....

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ntion of the assessee behind purchase of shares and such intention is to be gathered from the conduct of the assessee as seen from the facts and circumstances involved in each case. There are certain guidelines laid down in this regard in the various judicial pronouncements and even CBDT has also issued Circulars out lining such guidelines. If these guidelines are applied to the facts on the present case as explained by the ld. Counsel for the assessee from the relevant material placed on record .....

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