9911796707
TMI Blog2016 (9) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... is against the order of Ld. CIT(A) confirming the action of the AO in treating the profit arising out of sale & purchase of shares as business income as against declared by assessee as short term capital gain. 3. Briefly stated facts are that the assessee claimed the income arising out of sale and purchase of shares as Short Term Capital Gain or Long Term Capital Gain as the case may be. But the Assessing Officer treated the profit arising out of sale and purchase of shares as income from business for the reason that the assessee cannot be treated as investor as the pattern of the assessee for purchase and sale of shares is that of a trader due to volume of transaction and holding pattern of shares. According to Assessing Officer the hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction of sale and purchase of shares. The assessee is a partner in partnership firm from where he is deriving income from business. The Assessing Officer during the course of assessment proceeding noted the nature of business of the assessee is share trading but this was contested by the assessee before us that actually he is investor and not a trader in shares. The Ld. Counsel for the assessee before us stated that the entire sales and purchase of shares are through brokers and holding period is from 1 day to 180 days. He described that there are 67 transactions wherein the holding period is less than 15 days, the holding period of 15 transaction is less than 30 days, the holding period of 11 transactions is less than 45 days, the holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares through 163 transactions and sold the same through 126 transactions during the year. In view of these facts, Ld. Counsel for the assessee stated that the issue is covered by the decision of Hon'ble Bombay High Court in the case of CIT Vs. Gopal Purohit [2011]336 ITR 287(Bom). 6. On the other hand Ld. DR supported the order of Lower authorities. 7. Going through the facts of the case and arguments of both the sides, we find that the assessee has maintained the investment portfolio and all the sales and purchase of shares are routed through the same portfolio as noted above. The assessee has kept the entire investment of shares as an investment and not in the trading account. The assessee is not in the business of share trading r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 portfolios, one relating to investment in shares and another relation to business activities involving dealing in shares. The Tribunal held that the delivery based transactions in the present case, should be treated as those in the nature of investment transactions and the profit received therefrom should treated either as short term or, as the case may be, long term capital gain, depend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 2,93,652/- related to his wife and also interest paid to Shri. Farooq Hawa amounting to Rs. 1005/-. Aggrieved, assessee preferred the appeal before the Ld. CIT(A), who also confirmed the action of the AO in respect to disallowance of interest expenditure relating to payment made to his wife Deepika Dharia. Assessee came in second appeal before the Tribunal. 10. Now before us Ld. Counsel for the assessee stated that the loan taken from wife Deepika Dharia on 13/07/2016 amounted to Rs. 5,00,000/- has no nexus with advance of interest free loan because the same was invested by assessee in the FDR's maintained with Bank of India and on which interest income was earned and disclosed to the department. Ld. Counsel for the assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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