TMI Blog2020 (12) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... sed under the head 'Business Income'. Having gone through the order of ld. CIT(A), we noticed that there is no any infirmity in the order and reasoning given by the ld. CIT(A). That being so, we decline to interfere with the order of Ld. CIT(A) in directing the assessing officer, his order therefore, upheld and the grounds of appeal of the assessee are dismissed. - ITA No.3311/AHD/2015 - - - Dated:- 27-11-2020 - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Assessee : Shri Anil K Shah AR For the Respondent : Ms Anupama Singla Sr. DR ORDER PER DR. A. L. SAINI, ACCOUNTANT MEMBER: The captioned appeal filed by the assessee, pertaining to the Assessment Year (AY) 2010-11, is directed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -vis facts of the assessee's case and the decisions rendered by various-courts of law. 4. The ld. CIT(A) has further erred in not appreciating or considering the alternative facts and arguments of the assessee that if the capital gains are treated as business income then the closing stock would have to be valued at cost or market value whichever is lower and if this exercise is done in each of the previous year, the assessee would. be at an advantage in view of market value of shares being less than cost. The Id. C1T(A) thus while treating part of the STCG as business income has erred in failing to direct the AO to give effect of the same in the closing stock, which in turn does not give true and fair view of the accounts. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e delivery of the shares is taken or substantial amount of dividend is received, the transactions would not constitute investments. Where the taxpayer has abnormal short-term capital gains as compared to the long-term capital gains, the transactions in shares cannot be considered as investments. In this case, the frequency of transactions is more and the assessee has deployed infrastructure in sale and purchase of shares. Assessing officer relied on the CBDT (Central Board of Direct Taxes) circular which has laid down that the purchase and sale of shares with the motive of earning a profit would result in the transaction being in the nature of trade or adventure in the nature of trade, but where the object of the investment in shares of a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer to treat the 'Capital Gain from sale of shares held by the assessee for a period of one month or more, but less than one year i.e. ₹ 10,98,679/- should be treated as investment and profit earned from sale of the same should be assessed as Short Term Capital Gain ; while the shares held for less than a month i.e.₹ 30,57,137/- should be treated as trading purchases of the assessee and profits from the same should be assessed under the head 'Business Income'. This way, ld. CIT(A) allowed the appeal of the assessee partly. 6. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us. 7. Shri Anil K. Shah, Learned Counsel for the assessee, submits before us that Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee`s portfolio as an investment activity therefore the appeal of the assessee cannot be allowed based on the principle of consistency. We note that the issue regarding the charging of the investments vis-a-vis business income has been decided by the Coordinate Bench of ITAT, Ahmedabad, order dated 29.01.2010 in ITA No. 3554/Ahd/2008 and 1932/Ahd/208, wherein the Bench held that for the purpose of determining the short term capital gain, i.e. the shares which are held for a month and more but less than one year should be treated as 'investment' and on their sale, profit shall, be chargeable under the head short term capital gain, and where shares are held for less than month, gain from sale of these shares should be treated as & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business income of ₹ 13,43,609/- from share trading and separate trading and P L account is maintained by the assessee for share trading. The AO held that the assessee is engaged is frequent trading of shares for which he has maintained separately trading and P L account which shows that he was regularly buying and selling shares and had professional knowledge of the capital market. The AO found that taking into consideration the frequency of the transactions, length of period of ownership, infrastructure employee for share transaction, etc. show that the various transactions made in the sale of shares, has been done with the motive of profit and is a business income and therefore an addition of ₹ 41,55,817/- was made as income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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