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TMI Blog2018 (10) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... come . 2.0 Brief facts of the case are that the assessee is a partnership firm and derives income from investment activities. The return of income was filed declaring income of Rs. 19,96,804/- which included Short Term Capital Gains of Rs. 19,22,796/- and interest of Rs. 74,008/-. The Short Term Capital Gains were arrived at after claiming set off of brought forward short term capital loss of Rs. 19,53,229/- pertaining to assessment year 2007-08. The assessee had also claimed income of Rs. 1,75,54,960/- exempt under section 10(38) of the Income Tax Act, 1961 (herein after called as 'the Act') and dividend income of Rs. 26,36,252/- claimed as exempt u/s 10(34)/(35) of the Act. The Assessee also claimed carry forward of long term capital los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n shares and it was the sole activity of the assessee which is also an admitted object of assessee firm as per Partnership Deed. (ii) The CIT (A) has erred in not correctly appreciating the facts of the case that the statement of purchase and sale and also activity of the assessee proved that he was engaged in the business of purchase and sale of securities in an organized and regular manner and showing income therefrom under the different head is just a strategy to avoid tax. (iii) The CIT(A) has not appreciated that the turnover of the assessee was Rs. 27.5 crores and in the light of guidelines provided by CBDT Circular No. 4/2007 dated 15.06.2007, the substantial nature of transactions entered into by the assessee can be classified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 140 (Bombay)/[2011] 336 ITR 287 (Bombay)/[2010] 228 CTR 582 (Bombay) 5. Dalhousie Investment Trust Co. Ltd. Vs. CIT [1968] 68 ITR 486 (SC) 4.0 In response, the Ld. Authorised Representative submitted that presence of commercial motive is a primary legal requirement for trade whereas in the case of the assessee the period of holding of the investments and earning of substantial dividend income substantiate the assessee's claim that the shares were not acquired with the intention of trading but were held for investment purposes. It was submitted that the holdings shares which were sold during the year under consideration were held by the assessee firm between a period of one year to five years and, therefore, it could not be said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and securities held for a period of more than 12 months immediately preceding the date of transfer, the assessee desires to treat the income arising from the transfer thereof as capital gain, the same shall not be put to dispute by the Assessing Officer. The Ld. Authorised Representative also supported the order of the Ld. CIT (A) and submitted that department's appeal deserved to be dismissed. 5.0 We have heard the rival submissions and have also perused the material available on record. It is undisputed that 7 scrips under 10 separate transactions were sold which had holding periods ranging between 370 days to 1738 days. Thus, all the scrips were held for more than 1 year and up to approximately 5 years. It is also undisputed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntical issue after duly noting that in the earlier assessment years transactions in the investment portfolio by the assessee were accepted by the Assessing Officer. While dismissing the department's appeal, the Hon'ble Delhi High Court also duly noted the fact that the assessee had been maintaining two separate portfolios viz. investment portfolio and trading portfolio. The Hon'ble Delhi High Court also observed that the quantum or total number of transactions may not be determinative but in a given case, keeping in view the period of holding may indicate intention to make investment. We also find that CBDT Circular no. 6 dated 29.02.2016 also comes to the aid of the assessee wherein it has been clarified by the CBDT that where the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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