TMI Blog2012 (5) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... le of shares instead of business income treated by the A.O. without appreciating the fact that the assessee is dealing in large volume of shares, most of the shares are bought and sold within short period, while some are not sold due to market conditions and their holding with assessee remains beyond few days, it will not change the nature of the transactions and the assessee is very well engaged in the business of share trading, which denote that the motive of the assessee is to carry on business in shares to book profit rather than investment in shares . 2. During the assessment proceedings, AO found that the appellant had credited the following amounts in the capital account filed along with the return of income. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs6,23,130/- Total transactions No. of shares bought and sold Rs1,21,143 Purchase amount Rs4,57,44,173/- Sales amount Rs55,56,465/- Apart from the above, from the profit and loss account for the year ending 31-03-2004 and capital amount for the year ending 31- 03-2005, the AO observed that for A.Y. 2004-2005, the appellant had treated the income received from trading as business income whereas for the subsequent assessment years i.e., A.Y. 2005-2006, 2006-2007 2007-2008 the appellant had classified his income/loss from share trading as short term capital gain an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by the Hon ble Mumbai Tribunal in the case of J.M. Share Stock Brokers Limited vs. JCIT (Feb 2008) ITA No. 2801/Mum/2000 dated 30-11- 2007. it is true that the appellant has earned business income on non delivery based transactions for A.Y. 2004-2005 but that does not mean that income earned on sale of shares held as investment can be taxed as business income in the subsequent years. The appellant has made clear distinction between delivery based and non delivery based transactions and admitted income accordingly and except for A.Y. 2004- 2005, the appellant did not indulge in any non delivery based share transactions. As contended by the representative, even shares purchased as investment had to be sold within a short time depending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was accepted by the Hon ble Mumbai Tribunal for A.Y. 2006-07 by order dt. 20-12-2010 in ITA No. 5238/Mum/2009. Further, the total number of transactions and the number of scrips is less compared to the assessment year 2006-07. The appellant entered into 52 purchase and sale transactions as against 79 in A.Y. 2006-07, the other facts of the case being safe as in the earlier year. In view of the above, I find that the claim of the appellant has to be accepted . 3. DR relied upon the order of the lower authorities. Authorised Representative (AR) submitted that in earlier year (2006-07) same issue was decided in favour of the appellant by C Bench of the ITAT on 20-12-2010 (ITA/5238/Mum/2009). On page No.10 of the said order of the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 67,850.00 Tisco (1000) ₹ 1,39,750.00 Therefore, even prior to the assessment year 2004-05, the assessee was showing the purchase of shares as investment in the books of account and consequently if Rule of consistency has to be applied. The same should have been applied in the assessment year 2004-05, where the assessee has changed the method of accounting in comparison to the earlier year as well as in the subsequent year. Since, there are decisions on both sides on this point, therefore, each case has to be decided on its own facts. Having regard to the totality of the facts and circumstances of the case, we are of considered view that the transactions of sale and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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