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SWETABEN TEJASKUMAR SADHANI Versus DEPUTY COMMISSIONER OF INCOME TAX - CIRCLE-1 (3)

2016 (7) TMI 529 - GUJARAT HIGH COURT

Reopening of assessment - nature of adventure in trade OR investment - Held that:- The reasons recorded by the Assessing Officer there is no averment of any failure on part of the assessee to disclose truly and fully all material facts. The reasons referred to material already on record and referred to the sale and purchase transactions of shares by the assessee. On the basis of such materials, the Assessing Officer recorded that frequency and volume of transaction was quite substantial. The ass .....

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alidity of the Assessing Officer's prima facie conclusion that the petitioner was trading in shares and not investing to earn dividend. We only find that, in absence of failure on part of the petitioner-assessee to disclose truly and fully all materials facts, reopening of assessment, which was previously framed after scrutiny, could not have been done. Only on this count, the keeping petitioner's contention of change of opinion aside, impugned notice is quashed. - Decided in favour of assessee. .....

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the assessment year 2008-09. 2. The petitioner, as an individual, had filed the return of income for the assessment year 2008-09 declaring total income of ₹ 97.89 lacs (rounded off). Such return was later on revised by declaring the income of ₹ 48.49 lacs. Such revised return was taken in scrutiny. One of the claims of the petitioner was of short term capital gain of sale of shares. The Assessing Officer framed scrutiny assessment under Section 143(3) of the Act on 20.10.2010 accepti .....

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e income has to be treated as an 'income from business' and taxed accordingly. CBDT has also issued a guideline in the regard vide Circular No. 4 of 2007 dated 16.06.2007 providing the circumstances where the share trading income has to be regarded as business income. The assessee had filed return for A.Y. 2008-09 on 06.10.2008 returning income from share trading of ₹ 48,49,030/- (Short terms Capital Gain) which was assessed u/s. 143(3) of the Act accepting the returned income. Tax .....

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ctions was quite substantial. The assessee has sold 82% of its total purchases (Rs. 292.17 lakh) during the year itself and the balance unsold shares were purchased before 2-3 months of the year ending. The assessee has not held any stock for more than 6 months. It is apparent from the above that the assessee has made purchase and sales transactions with a motive to earn profit and were in the nature of an adventure in trade and it was not in the nature of investment to earn dividend. In view of .....

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