Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Meena Kothari Versus Addl. CIT-Circle-16 (1) , Mumbai

2016 (9) TMI 151 - ITAT MUMBAI

Sale and purchase of shares - short term capital gain or Business Income - Held that:- Mere volume or magnitude does not alter the nature of transaction, which are consistently assessed as income from capital gains from past years and even in future years by revenue. Where the assessee was holding large magnitude of shares as investment from year to year and transaction of shares in preceding years as well for the future years had been held as income from capital gains both on long term and shor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

short term capital gain. - Decided in favour of assessee - ITA No. 5350/Mum/2011 - Dated:- 29-8-2016 - Sh. Mahavir Singh, JM And B.R. Baskaran, AM Revenue by: Ms. Vinita Menon Assessee by: Shri Vijay Mehta ORDER Per Mahavir Singh, JM This appeal by the assessee is arising out of the order of CIT(A)-27, Mumbai in Appeal No.CIT(A)27/Addl.CIT16(1)/220/07-08 Order dated 03.03.2011. Assessment was framed by ACIT,Cir.16(1) under section 143(3) of the Income tax Act, 1961(hereafter the Act ) for the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ating the Short Term Capital Gain of ₹ 18,41,755/- as appellants Business Income. The appellant prays that gains of ₹ 18,41,755/- should be treated as Short Term Capital Gain and not business income. 3. Briefly stated, facts are that the assessee is in the business of dealing in shares and earned income from business, Long Term Capital Gains (LTCG) on sale and purchase of shares, Short Term Capital Gains (STCG) on mutual funds, STCG on sale of shares and income from other sources. Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lling of shares in short period and gain arising out of the same, that also by using borrowed funds definitely involves risk and it is organized activity, hence, same is business. According to AO, the assessee has also taken help from professionals and paid professional fee for sale and purchase of shares. Accordingly, he treated this STCG declared by the assessee at ₹ 18,41,755/- as income from trading in shares i.e. the business income. 4. Aggrieved, assessee preferred appeal before CIT( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

olved. Nevertheless the appellant has not furnished any explanation whatsoever to controvert the fact recorded by the A.O. that the appellant has borrowed an amount of ₹ 1,01,44,225/- from Rohit Financial Services which has been used in purchase and sale of shares during the year. It is an accepted principle that an investor does not involve in borrowing of funds for the purpose of investment. Further the appellant herself submitted before the A.O. that the borrowed funds were utilized for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. The appellant fails on this ground. Aggrieved, the assessee is in second appeal before the Tribunal. 3. Before us, the ld. Counsel for the assessee apart from taking us through the assessment order and the order of the CIT(A), drew our attention to the ledger account of Rohit Financial Services and stated that the observations of the lower authorities that loan funds were used for purchase and sale of shares is totally wrong. He narrated that the correct facts that there is outstanding balance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rding to ld. Counsel for the assessee this amount is loan taken for purchase of shares, but was repaid subsequently and for this he produced copy of ledger account of Rohit Financial Services. Ld. Counsel for the assessee also stated that this ledger account of Rohit Financial Services clarifies purpose of taking loans from Rohit Financial Services, which is not for investment in the scrips of Munjal Auto of ₹ 32,52,662/- in the month of July. The assessee had repaid the sum of ₹ 53, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

el for the assessee also had taken us through the statement of accounts, the balance sheet and Schedules appended thereto to show that these shares were held as an investment. Further, ld. Counsel for the assessee also explained that the assessee has used this scrip as investment and Revenue has accepted the same as investment and also the income declared by assessee is LTCG in future years. Ld. Counsel for the assessee drew our attention to page 5 and 6 of assessee s paper book wherein computat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

low has examined these facts in proper perspective and just by recording wrong facts decided the issue. On the other hand ld. CIT-DR heavily relied on the assessment order and that of the order of CIT(A). 4. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the statement of ledger account of Rohit Financial Services that there is outstanding balance as on 01.04.2004 at ₹ 66,56,623/- and closing balance as on 31.03.2005 is at ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f shares on 29.07.2004. It is also a fact that the assessee has kept these shares as investment in its accounts and holding period is almost 4 to 8 months. Admittedly, the assessee has kept these investments for the purpose of long term and short term gains but not for the purpose of business. Revenue in earlier years i.e. 2004-05 has treated these transaction as investment and for this assessee has enclosed the details of accounts. Assessee has also filed copies of assessment orders for the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

involved investment in shares. The second set of transactions involved dealing in shares for the purposes of business (described in paragraph 8.3 of the judgment of the Tribunal as transactions purely of jobbing without delivery). The Tribunal has correctly applied the principle of law in accepting the position that it is open to an assessee to maintain two separate port folios, one relating to investment in shares and another relating to business activities involving dealing in shares. The Trib .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s on the other hand. Question (a) above, does not raise any substantial question of law. 3. In so far as Question (b) is concerned, the Tribunal has observed in paragraph 8.1 of its judgment that the assessee has followed a consistent practice in regard to the nature of the activities, the manner of keeping records and the presentation of shares as investment at the end of the year, in all the years. The revenue submitted that a different view should be taken for the year under consideration, si .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version