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TMI Blog2021 (8) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... HCL Technologies Ltd reflect active involvement of assessee as a ' trader' rather than as an 'investor' ignoring the fact that assessee is actively involved in other gainful activities. 2. That on the facts and circumstances of the case and in law , the Ld.CIT(A) has grossly erred in confirming the order of the AO that assessee's dealing in the shares of M/s HCL Technologies Ltd is in the nature of 'trade' where as AO accepted assessee as an 'investor' for dealing in other shares and securities. 3. That on the facts and circumstances of the case and in law , the Ld. CIT(A) has erred in confirming the order of AO and not following the binding legal precedents where it was decided that the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares of M/s HCL Technologies Ltd . 2. To allow computation of the assessee that is 'short term capital loss' of Rs l,23,14,530/- on sale of shares M/s HCL Technologies Ltd is as per law accordingly set off is permissible against' short term capital gain' earned on sales of other shares and securities during the relevant assessment year. 3. Any other relief as deemed fit in circumstances of the case . 3. The assessee is an individual and partner in M/s Hirow Industries to file a return of income for Assessment Year 2015-16 declaring total income of Rs. 33,53,380/-. The Assessing Officer observed that the short term capital loss of Rs. 1,23,14,530/- was mainly on account of sale of shares of one Company namely HCL Technologie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer , dealings in the shares of HCL Technologies Ltd. indicated a pre projected intention to set off the short term capital loss incurred on account of bonus stripping of HCL Technologies Ltd. shares against the short term capital gain earned on the sale of other equity shares with mutual funds. Thus, the Assessing Officer made addition of enhanced short term capital loss by an amount of Rs. 1,23,14,513.05 and treated Rs. 1, 16,88,467.50/- as income from short term capital gain. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. AR submitted that as per the Assessing Officer the motive of the assessee in dealing in the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies have erred in the activity of dealing in shares of HCL Technologies Ltd. as a business activity. The assessee was wholly time involved as managing partner of M/s Hi Row Industries and there was neither an organization activity or trading in shares and there was neither any organizationally support in this regard. Lower Authorities have erred in confirming without bonus shares received form part of stock in trade and taking the cost of shares sold on an average basis also wrong. The Ld. AR relied upon the decision of the Hon'ble Supreme Court in case of CIT Vs. Madan Gopal Radhe Lal 73 ITR 652 and also relied upon the decision of the Hon'ble Bombay High Court in case of PCIT Vs. Ashok Apparels Pvt. Ltd (2019) 106 Taxman.com 63 (Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted by the Assessing Officer to be assessable as capital gains. Furthermore, it was pointed out that in the preceding assessment years sale as well as in the subsequent Assessment Years, the Assessing Officer has assessed gain on sale shares as an income assessable under the head capital gains. The Ld. AR further submitted that the CBDT Circular No. 6 dated 29/2/2016 relating to the whether the particular holding of shares by way of investments or forms part of the stock in trade is a matter which is within the knowledge of the assessee who hold the shares and it should in normal circumstances be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares which are stock in trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares as 23.03.2015 and incurred a loss of Rs. 1,23,14,530/-. It is an undisputed fact that the assessee was whole time Managing Partner of M/s High Row Industries and was receiving salary. The sale of shares as trading activity by the Assessing Officer is not justifiable as the assessee is not into the business of dealings in shares. In fact, the assessee treated the income as short term capital gain and set off the loss incurred in the transaction against the Long Term Gain obtained from the dealings in sale of other equity shares and mutual funds. In fact, the assessee made investment in mutual funds and equity shares of Rs. 6,26,063.35/- on these transactions. During the previous, year, the assessee had made transaction in ten compani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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