9911796707
TMI Blog2017 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 was filed late by the appellant u/s. 139(4) of the Income Tax Act, 1961 despite the fact that the appellant, who got her books of account audited u/s. 44AB of the Income Tax Act, 1961 had filed her return of income on 22/09/2009 i.e. before the due date 30/09/2009 u/s. 139(1) of the Act in the light of his own finding that the loss incurred by the appellant was under the head "Business & Profession". 3. The relevant facts as culled out from the materials on record are as under:- During the course of appellate proceedings, the appellant has filed a written submission which is reproduced as under:- ".....In continuation of submission dated 16-01-2012 your appellant hereby submit before Your Honour that he has also done share trading bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trading operations, selling securities on hand and or buying new items of securities based on the sentiments and movement of stock market. He chooses to buy securities when market is bullish and sells those securities when it turns bullish. This enables him to secure considerable profits as a result of value addition to his holding. Under PMS a person deposits the money under the contract for a period normally not less one year. After depositing the money the investment in securities is left to the choice of the portfolio manager. The assessee has no control either on selecting the securities or the period of holding. The portfolio manager normally gives the account quarterly on the basis of which the investor comes to know about the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as carried out trading in shares on behalf of his clients to maximize the profits, Therefore, it cannot be said that shares were held by the assessee as investment. 3. During the year under consideration, your appellant has made: a) share trading transactions done through HDFC PMS in a value more than 40 lacs. b) 375 share transactions done through Reliance PMS. c) Another 599 share transactions done through Reliance PMS. d) HDFC PMS portfolio Daily Average of Rs. 1,60,70,490/-. e) borrowed funds cl. Balance of Rs. 1,48,44,500/- at the end of the year part of the said money which is used in share trading business. f) Maintenance of two separate A/c. Investment in Shares as as "Invesment" and Trading of shares as 'Stock in Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between similar transactions carried out by an individual in shares find the transactions carried out by portfolio manager. Such transactions can be compared with trading in commodities or real estate. If an assessee gives money to a property dealer with the instructions to purchase, get possession and sale at a reasonable profit keeping in view the market conditions. The property dealer acting as an agent enters into series of transactions of purchase and sale earns profit in some of the transactions and incurs loss in some of them. The property dealer after charging, his commission and expenses will hand over the amount together profit to the principal. Can the profit earned or loss incurred on such transactions be treated as capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess Loss : 41,44,710/- Short Term Capital loss: -1,99,206/- But learned AO was not satisfied with the contention of the assessee and accordingly addition of Rs. 41,44,710/- loss was not allow to be carried forward. 4. Against the said order assessee preferred first statutory appeal before the learned CIT(A) but to no avail and learned CIT(A) dismissed the appeal of the assessee. 5. We have heard both the parties and gone through the impugned order. In this case, assessee gave her funds to the PMS Manager as in investment and there is no involvement of assessee in day to day transaction of the funds. The result of profit and loss in the end of the year from PMS Account is a capital loss. In earlier year assessee was dealing in shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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