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TMI Blog2019 (9) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... together and being disposed together, for convenience sake. 2. Shri Amit Jain, the assessee, an individual, is proprietor of M/s. Amit S Fragrances, which is manufacturing and trading in fragrance supari, trades in textile handloom goods. Apart from receiving salary, the assessee admitted income from letting out of property, business (intraday) trading in shares, commission and interest income. During the assessment years 2014-15 & 2015-16, the assessee admitted short term capital gain and short term capital loss from sale of listed shares and also admitted short term capital gain from sale of shares u/s. 111A of the Income Tax Act, 1961 (in short 'the Act'). While making the assessments for AYs 2014-15 & 2015-16, the Assessing Officer (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Commissioner of Income Tax (Appeals) is biased, arbitrary, and contrary to law, considering the facts and circumstances of the case. 3. The Commissioner of Income Tax (Appeals) has failed to appreciate the fact that the business of Appellant was manufacturing and trading in fragrance supari and also trades in textile handloom goods and the Appellant had invested its surplus capital fund in the shares as an investment and not as a business activity. 4. The Commissioner of Income Tax (Appeals) has failed to appreciate that the Appellant had been showing the investments in shares as 'Investments' in its books of account and not as 'Stock-intrade'. 5. The Respondent had failed to note that Appellant had earned a dividend Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 S.No. Particulars Intraday Trading Short Term Long term Business Exempt income 1. Turnover 13,16,24,156.00 8,01,24,374.29 23,20,998.00 1,28,12,448.00 2. Profit 6,35,444.00 48,61,982.00 1,22,146.31 4,23,853.27 2,58,795.00 3. Classification by Assessee Business income Capital gains Capital gains Business income Exempt income 4. Classification by AO Business income Business income Capital gains Business income Exempt income Relying on the decision of the Hon'ble High Court of Delhi in the case of CIT v. Om Prakash Arora in ITA 539/2012 dt 01.4.2014, the AR submitted that the various factors approved therein are taken into consideration and applied in this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eager amount of dividend and therefore, the ld. CIT(A) held that the income arising from sale of shares is assessable as business income only. However, he has also directed the AO to value the inventory of earning stock and closing stock and also isolate the transactions having the nature of speculative business and treat it separately. The ld. D R submitted that the decision of ld. CIT(A) is in accordance with criteria laid down by the Hon'ble High Court of Delhi , which was relied on by the ld AR, supra, and hence pleaded that the assessee's appeals may be dismissed. 6. We heard the rival submissions and gone through the relevant material on record. For the AYs 2014-15 & 2015-16, apart from various heads, the assessee has admitted income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le as business income and assessed accordingly. Now, in this regard, reliance is also placed on the decision of Hon'ble Delhi High Court in the case of Om Prakash Arora (supra), the relevant portion of which is extracted as under: "7. The factors which Courts and Tribunals have to take into consideration whilst deciding whether income gained during a particular period is business income through purchase and sale of shares or other tradable capital assets, or capital gains on account of sale of such assets, has been spelt out and reiterated in a number of decisions. These include Raja Bahadur Visheshwar Singh v. CIT, (1961) 41 ITR 685 (SC); Commissioner of Income Tax, U.P v. Madan Gopal Radhey Lal, [1969] 73 ITR 652 (SC); Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is indicative of the purchases being an investment. Furthermore, it would be relevant to ask whether the intention behind the purchase was to enjoy dividend, or merely to earn profit on sale of shares. Importantly, a commercial motive is an essential ingredient of trade in this context. (5) Whether the items in question were valued at cost. If so, it would indicate that they were investments. Where they were valued at cost or market value or net realizable value, whichever is less, it will indicate that items were treated as stock-in-trade. (6) Finally, it would be relevant to consider how the assessee is authorized in its Memorandum / Articles. 8. It has also been held that if the business activity of the assessee is trading in shar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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