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TMI Blog2016 (9) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... from the assessment order dated 16th December, 2009 passed by the learned Assessing Officer (hereinafter called "the AO") u/s 143(3) of the Income Tax Act,1961 (Hereinafter called "the Act"). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income Tax Appellate Tribunal, Mumbai (hereinafter called "the Tribunal") reads as under:- "1. On facts and circumstances of the case, the learned CIT(A) has erred in treating a sum of Rs. 5,51,677 being capital gain taxable @10% as business income. This should be treated as short term capital gains taxable @10%." 3. The brief facts of the case are that the assessee is a partner in partnership firms from which the assessee derived income by way of share of profit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese transactions made by the assessee with a profit motive and considering the facts that the assessment in assessee's own case for the immediately preceding assessment year i.e assessment year 2006-07 under similar facts and circumstances of the case the entire profits on purchase and sale of shares were treated as income of the assessee under the head profit and gain from business and profession and hence the gains offered on short term capital gains of Rs. 5,51,677/- was treated as income of the assessee from business vide assessment order dated 16th December, 2009 passed by the AO u/s 143(3) of the Act. 5. Aggrieved by the assessment order dated 16.12.2009 passed by the A.O. u/s 143(3) of the Act, the assessee filed his first appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn dividend and good income. All the share dealings were done through recognized stock exchanges and were delivery based . The said investments are duly recorded in the books of accounts as 'Investment'. It was also submitted that in assessment years 2004-05 and 2005-06 the income was treated as investment income and charged to tax as capital gain in the scrutiny assessment framed by the Revenue, while in the assessment year 2006-07 the same was assessed as business income. Thus, the assessee prayed before the learned CIT(A) that the income be taxed as short term capital gains only instead of charging the same as income from business. The ld. CIT(A) considered the submissions of the assessee and the stand of the A.O. and observed that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appeal before the Tribunal. 8. The ld. Counsel for the assessee submitted that the assessee had made investments in shares which were purchased through recognized stock exchanges through brokers or IPO. The payments were made through cheque. The investments in shares are shown in the books of account as 'Investment' which are stated at cost. The assessee is a full time working partner in partnership firm and he does not have time to fully involve in the share trading business. The investments were made from the surplus own funds available with the assessee and no borrowings were made for this purpose and transactions were delivery based. In the assessment year 2005- 06 the Revenue has accepted the transaction as capital gain and no addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities below and submitted that the assessee had indulged in voluminous share transactions regularly and frequently with the motive behind these transactions was to earn profit. It was submitted that the authorities below have rightly brought the gains arising from shares held for a period of not more than one year as business income instead of short term capital gains as claimed by the assessee. 10. We have considered the rival contentions and also perused the material available on record including case laws relied upon. We have observed that the assessee is a working partner in partnership firms from where he is deriving income from share from partnership firm(exempt), interest on capital and remuneration . We have observed that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case , we are of the considered opinion that principle of consistency has to be maintained and followed in this year as facts are almost similar to that of preceding years and hence we direct that the income earned by the assessee from purchase and sale of shares with respect to shares held for not more than one year be held as short term capital gains chargeable to tax under the head 'Capital Gains' and not as business income chargeable to tax under the head 'Profits and Gains from Business or Profession' as held by the authorities below . The reliance is placed upon the decision of Hon'ble Bombay High Court in the case of CIT v. Gopal Purohit (2011) 336 ITR 287(Bom.) and decision of Hon'ble Supreme Court in the case of Radhasoami S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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