TMI Blog2017 (10) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... erty to adjudicate the same on the basis of material available on record. Resultantly, this ground of revenue’s appeal stands allowed for statistical purposes. Income from sale of shares - ‘business’ or ‘capital gains’ - Held that:- Assessee is a lawyer by profession and major portion of total income consist of professional income. A perusal of Balance Sheet reveals that the assessee reflects investment in securities under the head Investments and closing investment at year end is ₹ 51.61 Lacs against which the assessee’s personal capital & unsecured loans stood at ₹ 21.12 crores & ₹ 31.80 Lacs. The other loans are car loans and loans against Fixed Deposits. A perusal of Share Income Chart placed in the paper book reveals that the assessee has transacted mostly in listed securities and the transactions are mostly delivery based transactions. The total holding period of all the scrips is 6601 days and average holding period comes to 57 Days and total number of unique trade days is 64 days. This data is nowhere controverted by the revenue before us. Moreover, latest CBDT Circular No.6/2016 which is clarificatory in nature applies to listed securities and directs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travelling cost and ₹ 2 Lacs against hotel expenses and produced ledger copy in support of these expenses. However, Ld. AO noted that the assessee could not furnish sufficient documentary evidences against the same and also could not specify the professional purpose of the visit and therefore, made full disallowance of balance amount of ₹ 23,79,927/- as claimed by the assessee. 2.3 The second issue pertains to head under which share income would be assessable. The assessee reflected Short Term Capital Gain [STCG] of ₹ 1,21,01,161/- on sale of certain shares. Upon perusal of share transactions, Ld. AO noted that magnitude of the transactions was very high in terms of volume, frequency regularity. Further, the assessee earned miniscule dividend income of ₹ 3,02,468/- against share investment. The Ld. AO analyzed that out of 116 transactions, 111 transactions had holding period of less than 180 days. Further, in 40.5% of the transaction, the holding period was less than month and in 96% of the transactions, the holding period was less than 180 days. Further the assessee carried out repetitive transactions and therefore, the transactions were undertake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned expenses were incurred for the professional purposes. Our attention is drawn to the fact that foreign visit was a regular feature of assessee s profession and these expenses are being incurred year on year basis by the assessee and the Assessing Officer, in several other years accepted the same barring certain adhoc disallowance against the same to factorize for the personal element. The Ld. AR also contended that very little time was provided by the Ld. AO to adduce sufficient details and documentary evidences to substantiate the same and the assessee was pre-empted to demonstrate the same. Regarding treatment of Share Income , the Ld. AR placed reliance on the findings of Ld. CIT(A) and various judicial pronouncements to contend that the assessee being a professional lawyer, acted only as on investor and therefore, impugned income was rightly offered under the head capital gains . 5. We have carefully considered the rival contentions and perused relevant material on record. We find that relevant documents qua foreign travelling expenses have been placed on page nos.27 to Page Nos. 44 of the paper-book . Upon perusal of the same, we find that the assessee has incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 dated 15/06/2007 ( iv) Circular No. 6/2016 dated 29/02/2016 CBDT s office memorandum dated 13/12/2005 list following Circumstances to be considered by the Assessing Officers in determining whether a person is a trader or an investor in stocks:- ( i) Whether the purchase and sale of securities was allied to his usual trade or business/was incidental to it or was an occasional independent activity; ( ii) Whether, the purchase is made solely with the intention of resale at a profit or for longterm appreciation and/or for earning dividends and interest. ( iii) Whether scale of activity is substantial; ( iv) Whether transaction were entered into continuously and regularly during the assessment year. ( v) Whether purchases are made out of own funds or borrowings; ( vi) The stated objects in the Memorandum and Articles of Association in the case of corporate assessee; ( vii) Typical holding period for securities bought and sold; ( viii) Ratio of sales to purchase and holding. ( ix) The time devoted to the activity and the extent to which it is the means of livelihood. ( x) The char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence 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. 7. Applying the above principals upon the case in hand, we find that the assessee is a lawyer by profession and major portion of total income consist of professional income. A perusal of Balance Sheet reveals that the assessee reflects investment in securities under the head Investments and closing investment at year end is ₹ 51.61 Lacs against which the assessee s personal capital unsecured loans stood at ₹ 21.12 crores ₹ 31.80 Lacs. The other loans are car loans and loans against Fixed Deposits . A perusal of Share Income Chart placed in the paper book reveals that the assessee has transacted mostly in listed securities and the transactions are mostly delivery based transactions. The total holding period of all the scrips is 6601 days and average holding period comes to 57 Days and total number of unique trade days is 64 days. This data is nowhere controverted by the revenue before us. Moreover, latest CBDT Circular No.6/2016 which is clarificatory in nature applies to lis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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