TMI Blog2013 (1) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Manmohan (Vice President) And Sanjay Arora (Accountant Member) For the Appellant : O. P. Meena, DR For the Respondent : Vijay Mehta, CA-AR ORDER Sanjay Arora (Accountant Member) This is an Appeal by the Revenue arising out of the Order by the Commissioner of Income Tax (Appeals) 27, Mumbai ( CIT(A) for short) dated 03.03.2011, allowing the assessee s appeal contesting its assessment for the assessment year (A.Y.) 2005-06 u/s.143(3) of the Income Tax Act, 1961 ( the Act hereinafter) vide order dated 30/11/2007. 2. The only issue in the instant appeal is the character of the income of ₹ 30,32,957/- arising to the assessee on the sale of shares, i.e., whether as capital gains on transfer of short term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is spread is 21 , which increases to 25 as at the year end, suggesting that (at least) 4 scrips (out of the 10) purchased during the year have not been sold during the year. Though, thus, the numerical strength of the holding is definitely higher than that of a normative portfolio, one thing is patent, and that is that the investment in shares as at the beginning of the year is in capital assets, all of which, save one, have been retained by the assessee during the year, so that they, if not already so, became LTCAs as at the end of the relevant year. The assessee s investment behaviour, thus, clearly exhibits of him as being an investor in equity shares, which is also borne out by the fact that, apart from direct investment in share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased during the year (at ₹ 114.08 lacs). A good part of it (Rs.82.77 lacs), representing over 70% (valued at cost), stand sold out during the year. This is clearly in contrast and a departure from the investment behaviour qua the shares held as at the beginning of the year. There is definitely no bar for an investor to also trade in shares, and vice versa , so that what thus would have to be seen is if the shares bought during the year were with a purpose and intent to trade therein, or for being held as capital assets, even as were the shares held as at the beginning of the year. It is toward this that the assessee s statement of shares sold during the year, on which profit of ₹ 30.33 lacs stands earned (Ann. I), als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to an adverse information. In the present case, in the category 1 shares, the holding period, though low, is yet accompanied by a decent margin, which may have led to an exit decision. Though we do observe a negligible margin (Rs. 2133) in the case of Gujarat Sidhi Cement (HP 13 days), both the investment as well as the profit thereon is meagre to be of any consequence or to disturb the inference of the assessee being predominantly an investor. Qua the balance three scrips, the sale is after an adequately reasonable period and, more importantly, accompanied by a good margin, which on an annualized basis works to over 100%. The same can safely be regarded as short term capital assets, i.e., without imputing a trading motive to their purc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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