TMI Blog2014 (12) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... the shares through IPO was to get higher allotment of shares. We also find that there are no repetitive purchase and sale of the same script which means that there is no churning of shares. The total number of days utilized by the assessee for investment in shares is 32 days. Considering all these facts in totality, we do not find any reason to treat the assessee as a trader. We, therefore set aside the findings of the Ld. CIT(A) and direct the AO to treat the Short Term Capital Gain on sale of shares as declared by the assessee. - Decided in favour of assessee. - I.T.A. No. 7587/Mum/2010 - - - Dated:- 5-12-2014 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For the Appellant by: Shri Nishit Gandhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stor. The explanation of the assessee did not find favour with the AO. The AO observed that the assessee has applied for the IPO of FCS Softwares Solutions Ltd., by taking finance from M/s. Merit Credit Corpn. Ltd. and also from Masat Texturisers Twisting Pvt. Ltd. The application amount was for 35 lakhs shares amountinto ₹ 8.75 lakhs. The assessee was allotted 12971 shares on 17.9.2005 and the shares were sold on 22.9.2005 and 23.9.2005 at the average rate of ₹ 228/- as against the purchase price of ₹ 50/- per share. The AO proceeded by considering the CBDT circular qua Instruction No. 1827 dt. 31.8.1989 and instruction dt. 16.5.2006 and treated the share transaction of the assessee as business income. 4. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. The IPO funding availed by the assessee was to get more allotment but the fact of the matter is that the assessee was an investor and the sole intention of applying in the shares through IPO was to get higher allotment of shares. We also find that there are no repetitive purchase and sale of the same script which means that there is no churning of shares. The total number of days utilized by the assessee for investment in shares is 32 days. Considering all these facts in totality, we do not find any reason to treat the assessee as a trader. We, therefore set aside the findings of the Ld. CIT(A) and direct the AO to treat the Short Term Capital Gain on sale of shares amounting to ₹ 17,26,855/- as declared by the assessee. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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