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TMI Blog2013 (1) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... own income under the head "Short Term Capital Gains" at ` 14,41,279, "Income From Long Term Capital Gains" at ` 12,10,89,291, and "Income From Other Sources" ` 17,571, which do not include dividend income of ` 62,46,014, which has been claimed as exempt under section 10(34). Besides this, the assessee has shown business loss of ` (-)3,18,433. The assessee is regularly trading in shares and the capital accounts of the assessee revealed that all the receipts of the assessee are mainly on account of transactions in shares and securities. In the computation of income, the assessee has bifurcated these credit entries and offered the profit & loss on sale of shares as "Short Term Capital Gains" or "Long Term Capital Gains" and business income separately. In view of the regularity, volume, turnover, period of holding of the shares and the value of the transactions in shares, the Assessing Officer formed an opinion that income under the heads "Short Term Capital Gains" and "Long Term Capital Gains" shown by the assessee falls into the category of "Business Income". He further noted that the transactions of shares shown under "Long Term Capital Gains" and "Short Term Capital Gains" were in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, also, he held that income from sale of shares shown by the assessee under the heads "Long Term Capital Gains" and "Short Term Capital Gains" has to be accepted as per the reasoning given from Pages-11 to 15, of the appellate order and the Assessing Officer's action for treating the same as "Business Income" was accordingly reversed. 6. Before us, the learned Departmental Representative relying on the detail findings given by the Assessing Officer submitted that the findings given in the earlier years cannot be held to be res-judicata in this year, as each year is independent. The Assessing Officer has brought on record sufficiently that the assessee has been dealing in shares regularly and has undertaken several transactions specifically those shown under the head "Short Term Capital Gains". Thus, the income shown by the assessee in relation to such share transactions has rightly been taxed under the head "Business Income". He, thus, strongly relied upon the order of the Assessing Officer. 7. The learned Counsel for the assessee, on the other hand, submitted that similar issue has been decided by the Tribunal in assessee's own case in the assessment years 2005-06, 2006-07 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y. 2006-07 U/s. 143(3) S. No. Holding period Long Term Gain (Rs.) Nos. of Scripts 1 1-2 years 28,58,473/- 2 2. 2-5 years 1,45,59,782/- 21 3. 5-10 years 99,95,801/- 27 4. 10 or more 1,67,123/- 10 Total 2,75,81,179 60 A.Y. 2005-06 U/s. 143(3) S. No. Holding period Long Term Gain (Rs.) Nos. of Scripts 1 1-2 years 35,20,327/- 11 2. 2-5 years 35,24,418/- 14 3. 5-10 years 84,79,577/- 24 4. 10 or more 4,99,450/- 7 Total 1,60,23,772/- 56 As compared to the above figures for the year under consideration, the assessee has done the following transactions: A.Y. 2008-09 U/s. 143(3) S. No. Holding period Long Term Gain (Rs.) Nos. of Scripts 1 1-2 years 1,14,44,923/- 14 2. 2-5 years 1,11,47,935/- 7 3. 5-10 years 48,01,498/- 12 4. 10 or more 25,589/- 2 Total 2,74,19,944/- 35 Similarly comparison of Short Term Capital Gain can be seen as under: A.Y. 2006-07 U/s. 143(3) S. No. Holding period Short Term Gain (Rs.) Nos. of Scripts 1 0-30 days 21,55,821/- 12 2. 31-90 days 24,92,433/- 11 3. 91-180 days 49,52,509/- 6 4. 181-270 days 7,38,740/- 5 5. 271-360 days 25,27,724/- 4 Tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as capital gain or as business income has been a debatable issue and there are conflicting decisions of the Tribunal on this issue. Each case is, therefore, to be based on its own factual situation. In the present case, the assessee had held the majority of shares for a very long time, varying from more than 1 year to 10 years. The income is mostly from long term holding of shares. In some cases, shares have also been sold at short intervals of less than 1 year, resulting into Short Term Capital Gain and even in such cases, mostly the shares were held for more than 90 days. It is possible for an investor to sell shares after holding for less than a year in order to reshuffle portfolio, etc. In a similar situation, the Tribunal in Assessment Year 2005-06 in ITA No.534/Mum/2009 accepted the claim of the assessee as an investor. In that year, the assessee had shown Long Term Capital Gain of RS.1,60,23,772/- and Short Term Capital Gain of RS.26,36,004/-. The assessee had also shown small income from trading, for which separate accounts had been maintained. Further, in the Assessment Years 2002-03 and 2004-05, the AO himself accepted the similar income declared by the assessee as cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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