Law:

Section:

ORDER S. Ravindra Bhat, J. - In these appeals, the Revenue contends that the Income Tax Appellate Tribunal ("ITAT") erred in concluding that the amounts originally brought to tax as business income of the assessee were short and long term capital gains as claimed in the returns filed. The following common question of law arises in both appeals: Did the ITAT fall into error in endorsing the decision of the CIT (A) that the sum of Rs. 35,75, 908/-short term capital gain (for 2006-07) claimed by the assessee and Rs. 1,43,43,154/- (for 2007-08) was not business income 2. The Assessing Officer ("AO") assessed the short term capital gains on sale of shares at Rs. 35,75, 908/- (for 2006-07) claimed by the assessee and Rs. 1,43,43,154/- (for 2007-08) as business income. On the other hand he accepted the gain on of Mutual Funds as short term capital gain/long term capital gains. In the proceedings before AO, in respect of 2006-07 the assessee's contentions were rejected, on the basis that that the assessee was doing frequent transactions for sale and purchase of shares; that on six occasions, the assessee had purchased shares of MIs, Monnet Ispat Ltd and on nine occasions, the assessee had made sales of this scrip, which meant that the sale-purchase was spread over the whole year; similarly, the assessee had purchased of shares of ING Vysya Bank Ltd. on four occasions and had transacted sales on two occasions. Thus, these activities, along with other facts of the case showed that its motive was to earn profit from sale and purchase of shares and not to earn dividends. The AO agreed with the assessee that the gain on Mutual Funds was gain on investment as units could not be purchased-sold in the open market. The gains from the purchase-sale of units of Mutual Funds were accepted by the assessee as income from capital gains, over long term or short term. By the CIT(A)'s order, the AO was directed to treat the income of Rs. 35,75,908/- as short term capital gain instead of business income, as done by the AO. 3. For 2007-08, it had been contended that the funds invested in MFs were investments, and not stock in trade, and that they were not tradable in the stock exchange…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492