TMI Blog2005 (7) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... rket the assessee may have paid more price for it. Merely for the reasons that assessee has to wait for two to three months for allotment process, the transaction cannot be held to be a non-business transaction. Similarly the transfer of shares purchased from secondary market in the name of the assessee has little relevance to arrive at a conclusion that profit arising out of sale of those shares is also a non-business transaction as non-transfer of those shares in the name of the assessee may have effected the legal title of assessee to enable her to sell them at appropriate time. We are of the opinion that the Assessing Officer was right in holding that the income arisen to the assessee out of sale of shares was assessable under the head 'Profits and gains of business or profession' and the ld. CIT(A) was wrong in holding that such profit in the case where assessee acquired shares from primary market and in a case where purchases were from secondary market and the assessee got the shares transferred in her name was an income assessable under the head 'Capital gain'. We, therefore, set aside the order of the ld. CIT(A) and restore that of the Assessing Officer for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be treated as income arising as Long-term capital gain . The contention of assessee has been turned down by ld. Assessing Officer on the ground that assessee is dealing in shares on a very large scale in all the years under consideration. The Assessing Officer has listed out the purchase and sale done by assessee with respect to shares in assessment years 1991-92 and 1992-93 and thus arrived at a conclusion that it was the income earned by assessee from business and for this purpose, he has placed reliance mainly on the decision of Hon'ble Supreme Court in the case of Raja Bahadur Visheshwara Singh v. CIT [1961] 41 ITR 685. The volume of sale and purchase of shares as mentioned in the order of CIT(A) for assessment years 1992-93 to 1994-95 is as under:- A.Y. Purchase Sale 1992-93 14,02,719/- 16,54,885/- 1993-94 42,33,928/- 77,13,385/- 1994-95 33,00,460/- 62,22,128/- The details of return of income, short-term capital gain and long-term capital gain in respect of sale and purchase of shares is as under:- A.Y. Returned income Short-term capital gain Long-term capital gain 1992-93 8,97,860/- 39,220/- 2,65,514/- 1993-94 55,61,253/- 28,724/- 47,06,782/- 1994-95 23,08,675/- 2,20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased by her from secondary market (in the case where she did not get transferred those shares in her name) was an income earned by assessee as profits and gains of business or profession . 5. After narrating the facts, ld. DR contended that assessee entered into the activity of purchase and sale of shares with a sole and exclusive intention to re-sell them at profit and she never had any intention to hold those shares for herself, therefore, the Assessing Officer was very much right in assessing the income arising therefrom as income from profits and gains of business or profession as against the claim of assessee that the said income was assessable as capital gain . Referring to the volume of sale and purchase, frequency of the transactions, investment of capital in the sale and purchase of shares, he contended that the activity carried on by the assessee was a systematic activity which has all the elements to bring the transactions within the ambit of word business as mentioned in section 28 of the Income-tax Act, 1961. He placed heavy reliance on the decision of Hon'ble Supreme Court in the case of Raja Bahadur Visheshwara Singh and contended that the order of Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of word 'business' as found in taxing statutes it is the sense of an occupation or profession which occupies the time, attention and labour of a person normally with the object of making profit. To record an activity as business there must be of course of dealings either actually continued or contemplated to be continued with a profit motive and not for support or plier. Whether or not a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in a class of goods and the transaction must ordinarily be entered into with a profit motive. Such motive must pervade the whole series of transactions effected by the person in the course of his activity. To infer from a course of transactions that it is intended thereby to carry on business ordinarily the characteristics of volume, frequency, continuity and regularity indicating an intention to continue the activity of carrying on the transaction must exist. [Reference in this regard can be made to the decision of Jurisdictional High Court in the case of CIT v. Motilal Hirabhai Spg. Wvg. Co. Ltd. [1978] 113 ITR 173]. In this dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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