TMI Blog2017 (1) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the assessee to its capital gains has not been disturbed by the AO for the above two assessment years. Determination of the character of a particular investment in shares or other securities, whether the same is in the nature of a capital asset or stock-in- trade, each essentially a fact specific determination. The AO has not come to finding whether the assessee has carried out repetitive transactions of same share. The AO has also not established whether the transactions were continuous and regular besides being systematic. We follow the decision in CIT vs. Amit Jain (2015 (3) TMI 720 - DELHI HIGH COURT ), CIT vs. Datta Mahendra Shah (2015 (9) TMI 970 - BOMBAY HIGH COURT ) and confirm the order passed by the ld. CIT(A). - ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from capital gains. 3. During the year under consideration, the assessee has shown short term capital gains of ₹ 88,41,354/- and long term capital loss of ₹ 30,16,928/- on purchase and sale of shares. The short term capital gains is computed after deducting expenditure such as demat charges of ₹ 12,615/-, STT of ₹ 13,08,431/- and interest on borrowed funds of ₹ 24,13,300/-. The Assessing Officer (AO) asked the assessee to explain as to why transactions in shares should not be treated as business activity. The assessee filed a submission before the AO on 23.02.2013 which has been extracted at page 2- 4 of the assessment order. The AO came to a finding that the main activity carried out by the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : The allegation of the revenue authorities is that the assessee has indulged in to high frequency transaction. This in itself could not mean that trading activities have been carried out. A prudent investor always keep a watch on the volatility of the market and makes sound investment decision in accordance with such market fluctuation and has the liberty to liquidate its investments in shares as and when necessary. The law itself has recognised this fact by treating the same as short-term capital gains for shares held less than 12 months and long-term capital gains where the shares are held for more than 12 months. 4.1 The ld. CIT(A) also observed that the assessee has income from other heads over the years and as far as share tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. Reliance is placed by him on the decision in the case of CIT vs. Amit Jain (2015) 374 ITR 550 (Delhi), CIT vs. Datta Mahendra Shah (2015) 378 ITR 0304 (Bom), DCIT vs. Shri Mahender Kumar Bader (ITA No. 605/JP/2013) for A.Y. 2008-09 and Tarujyot Investment Ltd. vs. ACIT (2016) 48 ITR (Trib) 33 (Ahmedabad). 7. We have heard the rival submissions and perused the relevant material on record. We begin with the decision relied on by the ld. DR in the case of Shri Sanjay Marwah (supra) . In that case, the AO noted that in majority of transactions holding period was less than one months. Even the maximum period of holding was four months. The assessee also carried out 1409 transactions in derivative trade having trade am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial to differentiate the assessee s activities for the subject assessment year, since they fundamentally remained the same and unchanged. 7.2 In the case of Smt. Datta Mahendra Shah (supra), the reasons for considering the short term capital gain as business income by the AO were the following: a) The assessee dealt with more than 60 companies during the year. b) Holding period of shares is less than 30 days in more than 30% cases. c) of the transactions involving 1/5th of the turnover was done in one month only. d) There are five speculative transactions and the assessee filed 3CD report accepting the nature of transactions as trading in shares . e) The assessee is a Director in M/s Jayanand Securities Ltd. which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee paid securities transaction tax. Therefore, its transactions should be treated as those of an investor. Though it is not a direct circumstance, it could be one of the cumulative factors, among others to give a pointer to the nature of transactions. The assessee took delivery of shares and, thereafter, sold them. The only circumstance which was against the assessee was the number of transactions. But that was only one circumstance, amongst others, required to be appreciated by the adjudicating authority to collect the intention of the assessee while making investment. The Department had not appreciated the transactions in the right perspective. Even in subsequent years, the transactions of investment by the assessee had not been disturb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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