9911796707
TMI Blog2016 (7) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... g to Rs. 60,28,574/- earned by the assessee as business income. 3. The assessee is a salaried employee, employed with the Indian Institute of Management, Ahmedabad. The return of income for the impugned assessment year was filed on 28.07.2006 declaring total income at Rs. 69,25,500/-. On the basis of AIR information, the return was selected for scrutiny under CASS and accordingly statutory notices were issued and served upon the assessee. 4. During the course of the scrutiny assessment proceedings, the A.O. noticed that the assessee has declared income from salary, capital gain on sale of shares and securities and income from other sources. 5. The A.O. was of the firm belief that the assessee has frequently and repeatedly traded in share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. 9. We have carefully considered the rival submissions and have given a thoughtful consideration to the orders of the authorities below. 10. The dispute is regarding the nature of income on sale and purchase of shares by the assessee. The issue, whether the income from sale and purchase of shares in a particular case should be treated as capital gain or as business income has been a debatable issue and there are conflicting decisions of the Tribunal on this issue. Each case is therefore, to be based on its own factual situation. A perusal of the profit and loss account of the assessee shows that the assessee has separately s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... securities, the same can be held either as capita! assets or stock-in-trade/ trading assets or both. Determination of the character of a particular investment in shares or other securities, whether the same is in the nature of a capital asset or stock-inITA trade, is essentially a fact-specific determination and has led to a lot ol uncertainty and litigation in the past. 2. Over the years, the courts have laid down different parameters to distinguish the shares held as investments from the shares held as stockin- trade. The Central Board of Direct Taxes ('CBDT') has also, through Instruction No. 1827, dated August 31, 1989 and Circular No. 4 of 2007 dated June 15, 2007, summarized the said principles for guidance of the field for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years; c) In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT. 4. It is, however, clarified that the above shall not apply in respect of such transactions in shares/securities where the genuineness of the transaction itself is questionable, such as bogus claims of Long Term Capital Gain/Short Term Capital Loss or any other sham transactions. 5. It is reiterated that the above pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,80,247 Accepted u/s. 143(3) A.Y. 2005- 06 1,47,72,152 8,73,335 55,21,143 -1,239,656 4,61,754 Accepted u/s. 143(1) A.Y. 2006- 07 4,12,69,176 60,28,574 36,96,126 6,40,470 6,68,713 In appeal before ITAT A.Y. 2007- 08 1,03,80,950 14,91,930 64,87,430 14,34,494 8,24,725 Accepted u/s. 143(1) 2008-09 4,69,647 1,27,343 1,47,82,988 40,92,931 4,92,933 Accepted u/s. 143(1) 2009-10 5,05,624 29,123 55,95,184 37,07,915 5,08,259 Accepted u/s. 143(1) 13. A perusal of the aforementioned history of assessments of the assessee shows that only during the impugned assessment year, the A.O. has taken a stand that that the assessee is trading in shares. The Hon'ble Supreme Court in the case of Radhasoami Satsang 193 ITR 321 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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