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TMI Blog2016 (11) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. Brief facts in this case are that the assessee is a company which is engaged in the business of development of real estate, speculation in shares and dealings in shares. The return of income was filed by the assessee on 29-11-2006 declaring total income of Rs. 1,57,50,580/-. In the Profit & Loss Account of the assessee, an amount of Rs. 1,05,31,812/- being short term capital gain on sale of shares, an amount of Rs. 9,585/- as long term capital gain has been shown. In the computation of income the assessee has treated these transactions chargeable to tax under the head 'capital gain'. However, the A.O. has taxed these amounts under the head 'business income'. The A.O. was of the view that the assessee is not a small scale retail invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been held that the assessee is an investor in the shares. He further submitted that the transaction in the share is through D-mat account and they have shown in the balance sheet as an investor. During the year, the assessee company had earned dividend income of Rs. 3254/- and no borrowed funds have been used for the purpose of investment in shares. The main contention of the assessee is that in A.Y. 2007-08, the assessee has earned short term capital gain of Rs. 7,24,45,273/- and in this year the assessee had earned short term capital gain of Rs. 1,05,31,812/-. In A.Y. 2007-08, the number of shares purchased are 24 whereas in the current year it is 26. The ld. Counsel for the assessee has mainly relied on the order of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in assessee's own case for A.Y. 2007- 08 does not come into any help to the assessee. He further contended that holding period which has resulted into short term capital gain is just 10/15 days and, therefore, intention of the assessee is evident that it wanted to maximize the profit. He also submitted that disclosure of shares in the books of account as investment cannot be the only criteria to decide the issue. The submission made by the ld. DR on less dividend received during the year was also to support its contention that the intention of the assessee is not an investor in shares but was profit therefrom. He also relied upon the orders of the A.O. as well as the ld. CIT(A) and contended that looking into the volume, frequency and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the knowledge of the assessee who holds the shares and it should, in normal circumstances, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares which are its stock-in-trade and those which are held by way of investment" The CBDT has also mentioned in its circular that it is possible for a tax payer to have two portfolios i.e. an investment portfolio and trading portfolio. This view has also been fortified by the decision of the Hon'ble Jurisdictional High Court in the case of CIT Vs Gopal Purohit - 336 ITR 287. 9. The assessee had opening investment at Rs. 4,01,49,296/- and the investment as on 31.3.2007 was at Rs. 3,97,99,072/-. This clearly shows 5 ITA No.1074/M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendra Gehlaut Vs JCIT 21 Taxmann .com 82 that " it cannot constitute a factor as in none of the case laws or CBDT Circular it has been held that borrowings will not be allowed in investment transactions. The investment in capital assets can also be carried out by way of borrowed funds, there being no bar notified by the law, judicial pronouncement or CBDT circular." 6 ITA No.1074/M/2011 9.2. Considering the entire facts in totality in the light of the judicial decision discussed here in above , we find that it has not been disputed that the assessee has shown shares as investment right from the date of purchase and that was shown as such in the balance sheet of the assessee which was filed before the AO. In our humble opinion, the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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