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TMI Blog2017 (2) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has erred in treating the transaction of purchase and sale of shares as STCG instead of business income. 2. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 3. The brief facts of the case are that the assessee filed her return of income on 27.09.2008 declaring total loss to the tune of Rs. 1,43,19,428/-. The return of income was processed u/s.143(1) of the Income Tax Act, 1961( in short "the Act"). The case was selected for scrutiny and statutory notice u/s.143(2) of the Act dated 02.09.2009 was issued and served upon the assessee on 26.09.2009. Thereafter, the notice u/s.142(1) of the Act dated 04.10.2010 was issued and served upon the assessee. The assessee has declared busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the CIT(A) is wrong against law and facts and is liable to be set aside. However, on the other hand the learned representative of the assessee has placed reliance on the order passed by the CIT(A) in question. Before proceeding further it is necessary to advert the finding of the CIT(A) on record which is hereby reproduced as under:- "7. I have carefully considered the contents of the assessment order and the appellant's submissions. From the paper book and other submissions filed before me by the appellant from time to time and from the analysis of the data presented above, in my considered opinion, the following facts emerge in an undisputed manner. 7.1 Appellant is a partner in four different partnership firms and share trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) It is no more res integra that a person can be both 'Investor' as well as 'Trader' in shares. (Draft Instruction No.2005, Instruction No.1827 dated 31.8.1989 & Circular No.4/2007 dated 15.6.2007 referred). The assessee has to maintain the distinction between shares held as stock and those held as investments in its records; 7.2 The appellant has been an investor in shares all along. Over the years she has consistently treated the entire investment in shares as an 'investment' and not as 'stockin- trade'. The income from transfer of shares was always offered to tax as capital gain. Shares held as investments were valued at cost and no mark to market loss was provided for. The portfolio held by the appellant over the years when considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46% of the total Short Term Capital Gains with a holding period more than 9 months and 57% of capital gains with a holding period between one to six months. It was hardly 1.38% of the overall capital gain for the appellant has accrued from stocks where the weighted average holding duration for scripts was up to 1 month. In respect of sale of shares within a month of holding it was explained to be triggered by an unprecedented volatility in the market during Nov' 07 to Jan' 08 that the appellant sold off shares within a short period of holding at loss, in fear of further large fall in market. Further, as submitted during the present proceedings, appellant has not resorted to churning of shares or repetitive transactions of the same company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as short term at Rs. 26,22,295/- and long term capital gain assessed at Rs. 1,86,846/-. Besides, shares were accepted as Investments in the balance sheet. Apparently, the facts of the case are similar in A.Ys. 2007-08 and 2008-09 and no fresh material has been brought on record by the A.O. at present. Further, appellant's claim regarding long term capital gains has not been disturbed by the A.O. for the year under consideration and thus, the A.O. himself has accepted that the appellant was investor in shares also. Further, STCG of Rs. 30,45,361/- is attributable to the sale of bonus shares of India Bull Real Estate (Rs.22,91,233/), Netwrok 18 (Rs.3,59,267/-) and TV18 (Rs.3,94,860/-). In fact AO himself accepted the LTCG from sale of shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income from short term capital gains offered to tax require no disturbance and cannot be treated as business income. Accordingly, the appeal is allowed in favour of the appellant on this issue. 5. On appraisal of the above mentioned order the CIT(A) has described each and every aspect of the investment of the assessee in shares. The CIT(A) was of the view that the facts and circumstances of the case are quite similar to the earlier years and the principle of consistency and uniformity is not required to be discredited in the circumstances when there is no major change in the transaction of the assessee. The CIT(A) has also placed reliance upon the law settled by the order of Hon'ble ITAT in the cases of J.M.Shares & Stock Brokers V. D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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