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TMI Blog2018 (6) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... after referred to as 'the Act'),dated 25.03.2013. 2. In this appeal, the main grievance of the assessee is that his short term Capital Gain on sale of shares in Gati Ltd, which should be assessable under the head "Capital Gain", has been assessed under the head "Income from business or profession". 3. The brief facts qua the issue are that assessee company furnished its return of income on 12.10.2010 for Assessment Year 2010-11 declaring total income to the tune of Rs. 71,48,280/-. The assessee's return of income was duly processed u/s 143(1) of the Act. Later, the assessee's case was selected for scrutiny u/s 143(2) of the Act and the Assessing Officer completed the assessment u/s 143(3) of the Act treating the 'Short-term Capital gain' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Gain by selling a part of total holding of one share, that is, Gati Ltd, and the company stated that it has been still holding6,09,306 shares of Gati Ltd, for more than two years. The assessee further submitted before the Assessing Officer that other two shares acquired by the company i.e. in TCI Finance Ltd. and in TCIindustries Ltd. were still held by the company as long term investment. All these shares were acquired out of the own funds of the company and no fundshad been borrowed for acquisition of these shares. Therefore, the assessee submitted before the Assessing Officer that the transaction of shares should be considered as "investment" and not as "business transaction". However, the Assessing Officer rejected the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit booking. If there are large volume of purchase and sale of shares, the, the assessee can be said to be engaged in systematic business activity. The frequency of transactions in shares can be held as a deciding factor whether the assessee is engaged in "business" or making "investment". Therefore, the ld. CIT(A) held that assessee is making purchase and sale on a continuous basis and besides being regular and systematic, he can be said to be engaged in business activity and, therefore, assessee's incomes should be assessable under the head 'business income'. 5. Aggrieved by the order of the ld. CIT(A), the assessee is in further appeal before this Tribunal. 6. The ld. counsel for the assessee has submitted before us that assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gain' and there is no stock in trade in respect of investments and all the investments are being valuing at cost. 7. On the other hand, the ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have noted in our earlier para and is not being repeated for the sake of brevity. 8. We have given a careful consideration to the rival submissions and perused the materials available on record, we note that treatment shown by the assessee in his books of accounts is an 'investment'. It is undisputed fact that the assessee has not shown these shares as a part of closing stock. The assessee has being valuing these investments at cost and does not claim the diminution in the value of these shares. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try made by the assessee in his books of accounts, i.e., the treatment in his books of accounts of the assessee. We note that, since, the assessee has shown the investment in its books of accounts under the head 'investment' and not under the head 'stock in trade', therefore, the intention of the assessee is not to treat them business income but to treat them as an investment. We find strength of the above discussion in the judgment of Hon'ble ITAT, Kolkata in the case of M/s Divyan Tie Up ITA No.164/Kol/2016 Assessment Year 2010- 11 wherein it was held as under: "6. We are of the view that on the issue, whether the income in question has to be assessed under the head income from capital gain or income from business, the assessee should d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration and the factual position discussed above, we note that assessee is having only one portfolio that is of investment and is consistently following to declare capital gain or loss on sale on investment, dividend is earned on investment and there is not stock in trade portfolio. Besides, the assessee is consistently valuing investment at cost and does not claim the diminution in valuing of investment. We have noted the intention of the assessee that the Board of Directors of the assessee company has passed the resolution stating that the motive of the company is to deal in investment and not to trade in shares, therefore, we are of the view that assessee's income i.e Short term Capital Gain by way of sale of investment shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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