TMI Blog2016 (10) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... der of authorities below - Decided in favour of assessee. - ITA No.1125/Kol/2013 - - - Dated:- 12-8-2016 - Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri Miraj D Shah, Advocate For The Respondent : Shri P.K.Chakraborty, JCIT-SR-DR ORDER PER Waseem Ahmed, Accountant Member:- This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-VI, Kolkata dated 30.03.2013. Assessment was framed by DCIT, Circle-5, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 29.12.2010 for assessment year 2008-09. 2. In this appeal three grounds have been raised out of which ground No.2 was not pressed and, therefore, same is dismissed as not pressed. The ground No. 3 is consequential and does not require separate adjudication. Hence, sole ground raised by assessee is as under:- 1. On the facts and in the circumstances of the appellant s case and in law, the learned Commissioner of Income Tax (Appeals), VI, Kolkata [CIT(Appeals)] has erred in upholding the assessment of the sum of ₹ 88,05,787 as income under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, AO treated the income of ₹88,05,787/- showed as STCG as business income of assessee. 5. Aggrieved, assessee preferred an appeal before Ld. CIT(A), whereas assessee submitted that assessee has been showing its income under the head STCG from the activities of sale-purchase of the shares and no adverse view had been made in the earlier year with regard to sale-purchase of the share. However, Ld. CIT(A) rejected the plea of assessee and upholding the action of AO by observing as under:- 36. On the analysis of the various decisions relied upon by the appellant and the Assessing Officer it is observed that there is no specific terms and conditions, which can be applied mechanically to come to a conclusion. The issue regarding taxation of gains from shares depends upon the facts and circumstances of each case. The Hon'ble appellate Courts have determined the issue on the facts of each case giving the various points/issues considered for coming to a conclusion regarding the head of income under which the share profit is to be taxed. 37. The frequency of buying and selling of shares by the appellants were high; only one demat account; the period of holding was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing officer. There are peculiar facts and circumstances where in the earlier assessment years and even in the Assessment Year 2009-10 the investments shown by the appellant have been upheld as investments by the Assessing Officer in the order u/s143(1) except in current year As per the various facts circumstances mentioned in the above Para 37 and after considering the observations of the Assessing Officer in the assessment order and submissions of the appellant and aforesaid discussion on this issue in detail, the short term capital gains on sale of shares is being held to be business income. It is held that the sale and purchase of shares shown in the investments portfolio as short term capital gain is treated as business income under the head of Profit Gains of Business for the current assessment year i.e. 2008-09. It is held that the sale and purchase of shares shown in the investments portfolio except long term capital gains is treated as business income under the head of 'profits gains of business' for current assessment year. The gain on sale of shares having short term capital gains is held to be assessed as business income. The long term capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in favour of assessee and at the same time, various courts have also decided the issue in favour of Revenue. However, to stop the litigation between the Department and assessee, the CBDT very recently has came out with a Notification No.6/2016 dated 29.02.2016 and relevant portion of the said Notification reads as under:- 3. Disputes, however, continue to exist on the application of these principles to the facts of an individual case since the taxpayers find it difficult to prove the intention in acquiring such shares/securities. In this background, while recognizing that no universal principal in absolute terms can be laid down to decide the character of income from sale of shares and securities (i.e., whether the same is in the nature of capital gain or business income), CBDT realizing that major part of shares/securities transactions takes place in respect of the listed ones and with a view to reduce litigation and uncertainty in the matter, in partial modification to the aforesaid Circulars, further instructs that the Assessing Officers in holding whether the surplus generated from sale of listed shares or other securities would be treated as Capital Gin or Business Inc, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, should be treated as those in the nature of investment transactions and the profit received therefrom should be treated either as short-term or, as the case may be, long-term capital gain, depending upon the period of the holding. The Tribunal has observed in 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 Tribunal correctly accepted the position that the principle of res judicata is not attracted since each assessment year is separate in itself. The Tribunal held that there ought to be uniformity in treatment and consistency when the facts and circumstances are identical, particularly in the case of the assessee. This approach of the Tribunal cannot be faulted. The Revenue did not furnish any justification for adopting a divergent approach for the assessment year in question. There cannot be any dispute about the basic proposition that entries in the books of account alone are not conclusive in determining the nature of income. The Tribunal has applied the correct principle in arriving at the d ..... 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