TMI Blog2016 (12) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... as an investor only in respect of the impugned transactions. Accordingly we set aside the order passed by Ld CIT(A) on this issue and direct the AO to assess the gains arising on sale of shares under the head Capital gains only. Disallowance made u/s 14A - Held that:- A perusal of the statements of total income of the assessee would show that the assessee did not claim any expenditure against any income. The question of apportionment of expenses between taxable income and exempt income would arise only if any expenditure is claimed by the assessee. Hence we are unable to agree with the view taken by the Ld CIT(A) that the provisions of Rule 8D provide for “deemed disallowance”. It is well established proposition now that the assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is continuity and regularity in purchase and sale of shares. Accordingly he held that the assessee is carrying on shares trading activity as a trader and not as investor. He accordingly assessed the short term capital gain of ₹ 48,96,441/- as business income of the assessee. The learned CIT(A) also confirmed the same and hence the assessee has filed this appeal before us. 3. At the time of hearing learned AR submitted written submissions and contended that the activities of the assessee, if examined in terms of various criteria listed out by the CBDT and Courts, would lead to a conclusion that the assessee is acted as an investor only. For the sake of convenience we extract below the written submissions given by learned AR : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f short-term capital gain of ₹ 48.96 lakhs, ₹ 1.6 lakhs is on account of holding of shares which are less than 1 month, ₹ 30.20 lakhs is on account of shares held for less than 3 months, and the balance ₹ 18 lakhs is from the scrips held for more than 3 months. 7. As per Circular No.4 of 2007 dated 15-06-2007, para 10, an assessee can hold shares on account of investment as well as stockin- trade. In the instant case, AO is therefore not justified in assessing capital gain as business income on the ground that the firm in which assessee is a partner is engaged in the business of buying and selling shares. 8. As per Circular No.6 of 2016 dated 29-02-2016 if the assessee opts for treating the shares as inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividend income. The Ld CIT(A) has observed that the assessee has dealt in 196074 number of shares. The assessee has pointed out that she has dealt in only 12 scrips, out of which four scrips were bought last year. Thus, it is seen that the assessee has purchased and sold higher number of shares in respect of 12 scrips only, meaning thereby, the volume cannot be taken to be high. We notice that holding period of shares for major portion of shares is reasonable. We further notice that the assessing officer has accepted the profit as Capital gains in AY 2009-10 and 2013-14 in the scrutiny assessment made u/s 143(3) of the Act. It is a established principle that a person can act both as trader and investor. 6. Hence, on a conspectus of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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