9911796707
TMI Blog2019 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 75,27,900/- which includes short term capital gains of Rs. 71,62,459/-. In the scrutiny assessment order dated 12/03/2015, the AO treated the income from purchase and sale of shares as income from business against treatment given by the assessee as short term capital gain by recording the following reasons: "(a) The volume of share trading was Rs. 13,23,00,977/- from which the assessee derived profit of Rs. 72,01,068/-. Therefore keeping in view the volume and frequency of share transactions, the income should be treated as Business income and not income from Capital Gains. (b) That the intention to resell the shares was there from the very beginning. The shares which were acquired by the assessee in IPO ( Initial Public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cern was dealing with share market activities. The assessee has done share trading through this concern only." 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A) and submitted as under: (a) that during the year there were purchase and sale only in 11 scrips, out of 11,4 were allotted in IPO. (b) All the purchases were through recognized stock broker or in the IPO market. (c) The intention was to invest for substantial period and to earn dividend. However, sometimes sales were made if the price of stocks moved up. (d) In all the cases, delivery of shares were taken and same are reflected in D-mat account. (e) It has been a consistent practice to show the shares under head Investment. (f) Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds: "1. The CIT (A) erred in facts and law while passing assessment order. 2. The CIT (A) erred in treating the profit arrived from purchase and sale of shares of Rs. 71,62,459/- as business income and speculative income which was to be assessed as short term capital gain. 3. The CIT (A) erred in not considering the CBDT Circular No.6/2016 dated 29.02.2016 relating to the issue of taxability of surplus on sale of shares and securities. 4. The Learned CIT (A) has erred in not following the principle of consistency in accounting treatment given since in earlier years income from shares was assessed as Capital Gains and not business/ spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares which taken place within a period of 10 days and 100% share transactions were completed within one month. In our considered view, the intention to hold the investment for long period or transfer within that period to earn additional profit is depending upon the action of the assessee but cannot be demonstrated. This is the one issue always lead to litigation. For this purpose and to reduce the litigation, the CBDT has issued a circular No. 06/2016. In the similar facts, the coordinate bench of Jaipur in the case of Mahender Kumar Bader (supra) has come to conclusion by observing as under: "5.3. Before us the moot question which is required to be decided is whether the income earned by the assessee on account of share is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it difficult to prove the intention in acquiring such shares/securities. In this background, while recognizing that no universal principal in absolute terms can be laid down to decide the character of income from sale of shares and securities (i.e. whether the same is in the nature of capital gain or business income), CBDT realizing that major part of shares/securities transactions takes place in respect of the listed ones and with a view to reduce litigation and uncertainty in the matter, in partial modification to the aforesaid Circulars, further instructs that the Assessing Officers in holding whether the surplus generated from sale of listed shares or other securities would be treated as Capital Gain or Business Income, shall take in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of shares and securities. All the relevant provisions of the Act shall continue to apply on the transactions involving transfer of shares and securities." In view of the circular, we have clearly noticed that the issue raised in this appeal stands fully covered by the Circular issued by the CBDT. Since the assessee has treated the securities as investment and not as stock in trade in all the years, therefore, in view of the CBDT Circular, the revenue is not permitted to take a contrary view in the present year and claimed that the security is stock in trade and, therefore, the profit/gain caused to the assessee be treated as business income. In our view, there is no merit in the contention of the revenue and is deserves to be dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
