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2016 (5) TMI 458 - ITAT AHMEDABAD

2016 (5) TMI 458 - ITAT AHMEDABAD - TMI - Sale of shares/mutual funds - STCG and LTCG OR business income - Held that:- We are not inclined to interfere with the order of the CIT(A) who has rightly directed the Assessing Officer to accept the impugned amounts returned by the assessee under the head the head Long Term Capital Gain and Short Term Capital Gains - Decided against revenue - ITA Nos. 1050 & 2759/Ahd/2011, ITA Nos. 1051 & 2760/Ahd/2011, CO No. 261/Ahd/2011 - Dated:- 30-3-2016 - SHRI SHA .....

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l of the Revenue, i.e., ITA No. 2760/Ahd/2011 in Assessment Year 2008-09. These appeals and cross-objection involve common issues, these were heard together and are being disposed of by this consolidated order for the sake of convenience. ITA No.1050/Ahd/2011 : AY 2007-08: By Revenue Assessee : Shri Ashish N. Soparkar 2. In this appeal, the Revenue has taken following grounds:- 1. The Ld. Commissioner of Income-tax (A) has erred in law and on facts in directing the AO to treated the STCG of S .....

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f the Assessing Officer, is with regard to the treatment of Short Term Capital Gain (STCG) of ₹ 58,61,267/- and Long Term Capital Gain (LTCG) of ₹ 67,56,417/-, totaling to ₹ 1,26,17,683/- on sale of shares/mutual funds. The Assessing Officer has treated the above income as business income on following reasons:- i. The assessee is dealer in shares ii. The magnitude of purchase and sales, the substantial nature of the transactions, the ratio between purchase and sales and the hol .....

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earning a profit rather than to derive income by way of dividend. vii. The transactions entered into by the assessee are in the nature of commercial transactions entered into with a view to earn profits viii. Not only were the transactions in large numbers but were carried out in a planned, systematic and organized manner. 2.2 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of the assessee and having considered the same, the CIT(A) has g .....

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be restored. On the other hand, ld. Authorized Representative for the assessee supported the order of the CIT(A). 2.3 We have heard the rival contentions and perused the material on record. We find that the assessee derives income from salary, property, share of profit from partnership firm in addition to capital gain on sale of shares and mutual funds and income from other sources. The shares were held by the assessee for fairly a long period of time. It is noticed that, in the past, the Revenu .....

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ar. Therefore, the CIT(A), after considering the facts and circumstances of the case and moreover, relying the ratio of decision of Hon ble Gujarat High Court in the case of DCIT vs. Smt. Divyaben C. Shah in Tax Appeal No.104 & 105 of 2001 and also in view of the CBDT Circular No.4/2007 dated 15.06.2007, rightly held that the assessee cannot be said to have been trading in shares. He accordingly rightly directed the Assessing Officer to accept the impugned amounts returned by the assessee un .....

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-07 & 07-08 and the Assessee by passing a journal entry on 31.03.2009 accounted for the notional loss of value of closing inventory of shares. Before us, Assessee could not controvert the findings of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of the ld. CIT(A) and thus the ground of Assessee of Assessee is dismissed. Thus, the appeal of Assessee is dismissed. 2.4 The ld. Authorized Representative also drew our attention to the order of the Hon b .....

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same as business income of the assessee. The CIT(A) as well as Tribunal held that profit on sale of shares was assessable as capital gain and therefore, allowed assessee s claim. On Revenue s appeal, the Hon ble Karnataka High Court held that the Tribunal was justified in ascertaining profit from sale of shares, as capital gains. 2.5 In view of the factual and legal discussion above, we are not inclined to interfere with the order of the CIT(A) who has rightly directed the Assessing Officer to .....

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om sale of shares and mutual funds as Short Term Capital Gain, instead of business income as assessed by the Assessing Officer. 2. On the facts and circumstances of the case, the Ld. Commissioner of Income Tax (A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A) may be set aside and that of the Assessing Officer be restored. 3.1 The issue raised in this appeal is similar to the issue we decided in assess .....

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the Revenue. ITA No.1051/Ahd/2011 : AY 2007-08: By Revenue Assessee : Shri Jayantibhai M. Patel 4. In this Revenue s appeal, following grounds were raised:- 4. The Ld. Commissioner of Income-tax (A) has erred in law and on facts in directing the AO to treating the STCG of ₹ 29,79,082/- and LTCG of ₹ 22,51,626/- on sale of shares/mutual funds as returned by assessee, instead of business income as assessed by AO. 5. On the facts and circumstances of the case, the Ld. Commissioner of I .....

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and issues being similar, so following same reasoning we are not inclined to interfere with the order of the CIT(A) who has rightly directed the Assessing Officer to treat the STCG of ₹ 29,79,082/- and LTCG of ₹ 22,51,262/- on sales of shares/mutual funds as returned by the assessee. Accordingly, we uphold the order of the CIT(A) and dismiss this appeal filed by the Revenue. ITA No. 2760/Ahd/2011 : AY 2008-09: By Revenue Assessee : Shri Jayantibhai M. Patel 5. In this Revenue s appe .....

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