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2016 (9) TMI 3 - ITAT MUMBAI

2016 (9) TMI 3 - ITAT MUMBAI - TMI - Gains arising on sale of shares - assessable as Short term capital gains OR business income - CIT(A) held that the assessee is an investor and not a trader during the year under consideration - Held that:- we are of the view that there is no reason to interfere with the order passed by Ld CIT(A) on this issue. We have earlier noticed that the Ld CIT(A) has analysed the facts prevailing in the instant year and has shown that the observations made by the AO on .....

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Assessee : Dr.P Daniel For The Department : Shri Nitin R. Waghmode ORDER Per B.R. Baskaran (AM) :- The appeal filed by the revenue is directed against the order dated 16-06- 2014 passed by Ld CIT(A)-29, Mumbai and it relates to the assessment year 2010-11. The revenue is aggrieved by the decision of Ld CIT(A) in holding that the gains arising on sale of shares is assessable as Short term capital gains instead of business income. 2. The assessee declared short term capital gains on purchase and .....

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frequency of transactions, funding position, repetitive nature of transactions, quantum of dividend receipts etc. to support his conclusion. In the appeal filed by the assessee, the Ld CIT(A) agreed with the contentions of the assessee and accordingly directed the AO to assess the gains arising on sale of shares as Short term capital gain. Aggrieved by the order passed by Ld CIT(A), the revenue has filed this appeal before us. 3. We heard the parties and perused the record. The solitary issue u .....

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the CBDT have listed out certain important criteria in this regard. However, the question should be resolved on a cumulative consideration of various criteria and most important one is the intention of the party at the time of purchase of shares. If the intention was to hold the shares as his investment, then the gains shall be assessable as Capital gains only. On the contrary, if the intention was to hold the shares as his trading stock, then the gain is assessable under the head Business. The .....

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n certain schemes and redeemed the same on making certain gains. We notice that that the assessee has made investments in different schemes of various mutual fund companies and there is repetition only in respect of two schemes. The prices of mutual fund units move in tandem with the movement of index of share markets and hence the assessee appears to have sold the units of mutual fund on making certain gains. The only negative factor in this group is the low holding period. 5. In respect of sha .....

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ture and sale of stainless steel bars. Hence the activity of investing in shares is not the only activity of the assessee. (b) With regard to the low holding period, the Ld CIT(A) noticed that the assessee has offered gains arising on intraday transactions as business income. In respect of inter day transactions, the Ld CIT(A) has observed that the assessee has sold the shares upon prices reaching the target levels. (c) The assessee s objective was to get maximum gains out of investments. Hence .....

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een used to give advances. The analysis of balance sheet of the assessee shows that the advances given by the assessee are always in excess of the borrowings. During the year under consideration, the borrowings were ₹ 8.26 crores and the amount lent by the assessee was ₹ 11.39 crores. (g) The assessee is having own capital of ₹ 18.21 crores and the investments balance available at the year end is ₹ 16.12 crores. Thus, the personal capital has been used to make investments .....

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and sale of shares and the same has been accepted in all the years since AY 2005-06. The AO has just taken figure of AY 2007-08 and 2008-09 to suit his observations to take an adverse view. (l) The AO has accepted short term capital loss arising on sale/ redemption of shares/mutual fund units in the earlier years. The AO cannot take a different view in the current year, simply for the reason that the assessee has made gains. (m) There is no material change in the facts of the case during the yea .....

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Shares & Stock Broking pvt Ltd (ITA No.799/Mum/2009 dated 24.12.2010). (n) In support of Principles of Consistency, the Ld CIT(A) has relied upon the decision rendered by Hon ble Supreme Court in the case of Radhasoami Satsang Vs. CIT (1992)(193 ITR 321). Accordingly the Ld CIT(A) held that the assessee is an investor and not a trader during the year under consideration Accordingly he allowed the appeal of the assessee. 5. We heard the parties and perused the record. The Ld D.R strongly supp .....

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