TMI Blog2019 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... ys 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. - Decided in favour of assessee. - ITA No. 1136/Hyd/2016 - - - Dated:- 11-1-2019 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Assessee : Shri Laxminiwas Sharma For the Revenue : Shri Nilanjan Dey ORDER PER S. RIFAUR RAHMAN, AM: This appeal filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Balance Sheet, the volume of transactions, the frequency of transactions, motive to earn profits, the period of holding clearly indicate that the assessee was carrying on regular and systematic trading in shares. (e) As a matter of fact! the major profit was derived through share transactions where purchase and sale had taken place within a period of 10 days. (f) More than 95% of income was derived from purchase and sale of shares within a period of 10 days and 100% of share transactions were completed within one month. Therefore it is beyond doubt that the assessee did not have any intention to hold the shares. (g) Assessee was engaged in share trading on almost all days when stock exchange was functioning. In the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opies of return of income / balance sheet for A.Y. 2009-10, 2010-11 and 2011-12 are enclosed. Reliance is placed on the following case laws: 1.Hema Hiren Dand Vs JCIT 17(1), Mumbai/ITA No.3469/Mum/2012 2.Smt.Shikha Gupta Vs The DCIT Circle II, Ludhiana / ITA No.906/Chd/2013 3.Shri Sandip Y Shah(HUF) Vs DCIT / ITA No. 1249/Mum/2012. 4. After considering the submissions of the assessee as well as referring to the CBDT Circular No. 4, dated 15/06/2007, the CIT(A) confirmed the order of the AO by observing as under: I have gone through D-mat account of appellant, there are multiple transactions on daily basis. Keeping in view the quantum, frequency of transactions and systemic and regular share trading activity car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laring the investment in shares as investment and declaring the income derived from these investments as income from capital gains. Further, he submitted that the assessee is consistently filed return of income on the above said method and also in the subsequent AYs which is accepted by the department. He submitted that the Jaipur Bench has decided in the case of Shri Mahender Kumar Bader in ITA No. 605/JP/2013 by following the Circular No. 6/2016 by CBDT. Therefore, he submitted that the AO has failed to follow the CBDT Circular No. 6/2016. 7. Ld. DR, on the other hand, relied on the orders of revenue authorities. 8. Considered the rival submissions and perused the material on record. We notice that assessee has declared income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set to include property of any kind held by an assessee, whether or not connected with his business or profession, but does not include any stock-in-trade or personal assets subject to certain exceptions. As regards shares and other securities, the same can be held either as capital assets or stock-intrade/ trading assets or both. Determination of the character of a particular investment in shares or other securities, whether the same is in the nature of a capital asset or stock-in-trade, is essentially a fact-specific determination and has led to a lot of uncertainty and litigation in the past. ITA No. 605/JP/2013 DCIT vs. Shri Mahender Kumar Bader Over the years, the courts have laid down different parameters to distinguish the shares h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held for a period of more than 12 months immediately preceding the date of its transfer, if 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. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years; c) In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT. 4. It is however clarified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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