TMI Blog2015 (10) TMI 2746X X X X Extracts X X X X X X X X Extracts X X X X ..... not to earn business income. - Decided in favour of assessee. - ITA No.906/Chd/2013 - - - Dated:- 15-10-2015 - SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER For The Appellant : Shri Hari Om Arora For The Respondent : Mrs. Raj inder Kaur, DR ORDER PER RANO JAIN, A.M. : This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-II, Ludhiana dated 27.8.2013 for assessment year 2006-07. 2. Briefly, the facts of the case are that the assessee filed return of income for the relevant assessment year declaring income of ₹ 11,95,283/- on 31.10.2006. During the assessment proceedings, the Assessing Officer noted that the assessee had shown income under the head short term capital gain amounting to ₹ 10,99,268/- and under the head Long Term Capital Gain amounting to ₹ 20,133/- on account of sale and purchase of shares. The Assessing Officer was of the view that the sale and purchase of shares was regular business of the assessee. Therefore, the income from the same was liable to be assessed under the head income from business and profession and not u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same as investment. The intent is clearly manifest in the balance sheet of the assessee where annexure appended and forming part of the same show that the investment in shares has been held as investment for many years. The assessee had earned substantial dividend on these investments during the year. It was further submitted that the profits on investment cannot be the criteria for assessing it as business income. She also pointed out that in the earlier assessment years, she has invested in mutual funds and shares and the same had been accepted as investment by the Department. Therefore, there is no reason to depart from earlier finding. Moreover, a total of 117 transactions made during the whole year are very negligible when compared to billions of transactions done on the stock exchange every day. Relying on a number of judgments of various High Courts and different Benches of the Tribunal, it was prayed before the learned CIT (Appeals) that the transactions of sale and purchase may be treated as investment. 4. The learned CIT (Appeals) did not find himself in agreement with the submissions of the assessee. His view was that the contention of the assessee that the sale and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. Physical delivery of all the shares has taken place and due securities transaction taxes have been paid which is one of the indicator to differentiate the transaction from the business transaction. Reliance was placed on a number of judgments of various High Courts and Benches of the Tribunal. It was also brought to our notice that the assessee has been treating the transactions relating to sale and purchase of shares as investment in the last many years and no dispute is arising with the Department on this issue. In view of these submissions, it was prayed that the transactions of sale and purchase of shares be held to be relating to investment and not for the purpose of any business income. 7. The learned D.R. relied upon on the orders of the Assessing Officer as well as of the learned CIT (Appeals). 8. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. For holding a transaction relating to sale and purchase of shares to be relating to business or that of investment, the most important criteria is to see the intention of the assessee while making these transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court). It is also undisputed that the assessee has earned an amount of ₹ 12,824/- as dividend during the year. On the basis of these undisputed facts, now we proceed to analyze the issues raised by the Assessing Officer to determine whether the assessee was engaged in the business of sale and purchase of shares or investment: i) As per the Assessing Officer, there were very high frequent transactions of sale and purchase of shares. It was brought to our notice through the help of chart filed by the assessee that in total 117 transactions were entered into during the year in 83 number of scrips. Out of these 83 scrips, 33 scrips were bought during the earlier years while 50 scrips were bought during the relevant assessment year. ii) On the issue of swift purchase and sale of shares, it was brought to our notice again with the help of the chart that the transactions were entered into within a span of one day to more than seven hundred days. There was only one transaction which was entered into within a span of one day. There were only 28 transactions which were done with the span of 15 days and there were around 50 transactions which were held within a span of mor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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