TMI Blog2016 (7) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... y reason to disturb the intention of the assessee. 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 [1991 (11) TMI 2 - SUPREME Court] has expounded the rule of consistency observing that if the facts are identical and the law has not changed then the view taken in the earlier years should be followed. CIT(A) did not erred in law and on facts in directing not to treat the short term capital gains earned by the assessee as business income. - Decided against revenue - ITA. No: 3437/AHD/2009 - - - Dated:- 7-7-2016 - SHRI RAJPAL YADAV, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y justifying his stand that the gains have to be taxed under the head short term capital gains. The detailed submissions made by the assessee did not find favour with the A.O. who was of the firm belief that the length of period of ownership, the frequency/number of transactions and the utilization of borrowed funds clearly shows that the assessee was in fact trading in shares and treated the entire capital gains as business income of the assessee. 6. Aggrieved by this, the assessee carried the matter before the ld. CIT(A) and reiterated the claim of capital gains. After considering the facts and the submissions and after discussing certain judicial decisions, the First Appellate Authority was convinced that the assessee was an investor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at cost. The Hon'ble Supreme Court in the case of CIT Associated Industrial Development Co Pvt. Ltd. 82 ITR 586, which decision has also been considered by the CBDT in its Circular No. 4/2007 dt. 15.6.2007, has observed that: Whether a particular holding of shares is by way of investment or forms part of the stock-in-trade is a matter which is -within the knowledge of the assessee who holds the shares and it should, in normal circumstances, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares which are its stock-intrade and those which are held by way of investment 11. The CBDT has further thrown light on this controversial issue in its Circular No. 6/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquiring such shares/securities. In this background, while recognizing that no universal principal in absolute terms can be laid down to decide the character of income from sale of shares and securities (i.e. whether the same is in the nature of capital gain or business income), CBDT realizing that major part of shares/securities transactions takes place in respect of the listed ones and with a view to reduce litigation and uncertainty in the matter, in partial modification to the aforesaid Circulars, further instructs that the Assessing Officers in holding whether the surplus generated from sale of listed shares or other securities would be treated as Capital Gain or Business Income, shall take into account the following a) Where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of shares and securities. All the relevant provisions of the Act shall continue to apply on the transactions involving transfer of shares and securities. 12. Considering the facts in hand, in the light of the aforementioned circular of the Board, in our considered opinion, the intention of the assessee at the time of the purchase of shares is paramount. If the assessee has clear intention of being an investor and showing the shares as investment, we do not find any reason to disturb the intention of the assessee. At this juncture, let us see the past and future assessments of the assessee:- Chart Showing Assessment Status of Short-term Long-term Gains on Sale of Securities From A.Y. 2000-01 to A.Y. 2009-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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