DCIT 14(2), MUMBAI V. RAGHAVENDRA PODDAR, MUMBAI

ITA 1817/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56193 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Keywords: Business income; Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, A.M. AND SHRI V. DU RGA RAO, J.M. ITA NO. 1817/MUM/2010 ASSESSMENT YEAR: 2006-07 ASSTT. COMMISSIONER OF INCOME-TAX-14(2), APPELL ANT EARNEST HOUSE, 3 RD FLOOR, NARIMAN POINT, MUMBAI 400 021. VS. RAGHAVENDRA PODDAR, RESPONDENT 312, 2 ND FLOOR, KALBADEVI ROAD, MUMBAI 400 002. APPELLANT BY : MR. C.G. K. NAIR RESPONDENT BY : MR. HARIDAS BHAT DATE OF HEARING : 15/12/2011 DATE OF PRONOUNCEMENT : 23/12/2011 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-25, MUMBAI, PASSED ON 03/12/2010 FOR THE ASS ESSMENT YEAR 2006-07 WHEREIN THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 1. THE ORDER OF CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) ERRED IN HOLDING THAT THE PROFITS ON SALE OF SHARES IS TAXABLE AS CAPITAL GAINS WHEN THE AO IN H IS ASSESSMENT ORDER HAS BROUGHT OUT CLEARLY THAT: A) THERE HAS BEEN FREQUENT PURCHASE AND SALE OF SHA RES B) THE PERIOD OF HOLDING OF THESE SHARES IS VERY SM ALL C) THE MOTIVE IS TRADING PROFIT CLEARLY ONLY IN INV ESTMENT IS CLEARLY EVIDENT IN THE SHARE TRANSACTIONS OF THE ASSESSEE. 3. THE LD. CIT(A) ERRED IN HOLDING THAT ONCE THE PR OFIT FROM SIMILAR TRANSACTION HAS BEEN HELD AS CAPITAL GAIN IN THE EA RLIER YEAR, THE SAME NEED TO BE FOLLOWED IN SUBSEQUENT YEARS, IGNOR ING THE ITA NO. 1817/MUM/10 RAGHAVENDRA PODDAR 2 SETTLED LAW/PRINCIPLE THAT EVERY ASSESSMENT YEAR IS SEPARATE AND RES-JUDICATA DOES NOT APPLY TO ASSESSMENT PROCEEDIN GS. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAD FIL ED ITS RETURN OF INCOMEON 31/10/2006 DECLARING TOTAL INCOME OF RS. 1 7,65,240/-, WHICH WAS PROCESSED U/S 143(1) OF THE ACT, AND WAS SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2). THE ASSESSM ENT WAS FINALLY COMPLETED ON 26/12/2008 BY DETERMINING THE TOTAL IN COME AT RS. 17,65,240/-. THE ASSESSEE HAD SHOWN A LOSS FROM BUS INESS OF RS. (-) RS. 7,34,400/-, SHORT TERM CAPITAL GAINS OF RS. 25, 77,287/- AND INCOME FROM OTHER SOURCES OF RS. 25,070/-. THE ASSE SSEE HAD OFFERED TO TAX RS. 18,67,957/- AS INCOME FROM SHORT TERM CA PITAL GAIN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE F URNISHED DETAILS OF SHARES WHICH WERE SOLD DURING THE YEAR, AND THE SAME WERE REPRODUCED BY THE AO AT PAGE 1 OF HIS ORDER, ARE EX TRACTED AS UNDER:- 1. VOLUME OF TRANSACTIONS: IT IS SEEN THAT DURING T HE YEAR UNDER CONSIDERATION, THE TOTAL NUMBER OF SHARES SOLD BY T HE ASSESSEE, THE PROCEEDS OF WHICH WERE SHOWN UNDER THE HEAD SH ORT TERM CAPITAL GAINS WAS 755235. IN VALUE TERMS, THE TOTA L COST OF PURCHASE OF SUCH SHARES WAS RS. 9,11,15,200/-. 2. FREQUENCY OF TRANSACTIONS: EXAMINATION OF THE PE RIOD OF HOLDING AND FREQUENCY OF TRANSACTION OF THE ABOVE S TATED SHARES REVEALED THAT MORE THAN 95% OF THE SHARES WERE HELD FOR HARDLY 2-3 DAYS. 3. IN VIEW OF THE ABOVE OBSERVATIONS, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE PURCHASE AND SALE OF SHARES A ND MUTUAL FUNDS SHOULD NOT BE TREATED AS A BUSINESS ACTIVITY AND TH E RESULTANT GAINS SHOULD NOT BE TREATED AS BUSINESS INCOME. THE AR OF THE ASSESSEE FILED HIS SUBMISSIONS VIDE LETTER DATED 24/12/2008, WHICH WERE REPRODUCED BY THE AO AT PAGE 2 OF HIS ORDER, AND AF TER CONSIDER THE SAME, THE AO SUMMED UP THE SUBMISSIONS OF THE ASSES SEE THAT A) HE HAS PURCHASED THE SHARES ON DELIVERY BASIS FROM THE RECOGNIZED STOCK EXCHANGE, B) HE IS NEITHER A SHARE BROKER NOR A DE ALER IN SHARES ON ITA NO. 1817/MUM/10 RAGHAVENDRA PODDAR 3 DAY TO DAY BASIS, AND C) THE SHORT TERM CAPITAL GAI N IS MOSTLY EARNED FROM INVESTMENT IN SHARES. THE AO OBSERVED THAT IT IS A FACT THAT IN ITS BALANCE SHEET THE ASSESSEE HAD NOT SHOWN ANY SHARES AS STOCK-IN- TRADE. HOWEVER, THE OTHER CONTENTION OF THE ASSESSE E I.E. THE SHORT TERM CAPITAL GAIN IS MOSTLY EARNED FROM INVESTMENT IS FACTUALLY INCORRECT. THE ASSESSEE HAD LOSS OF SUBSTANTIAL AMO UNTS FROM THE TRADING IN SPECULATION ALSO. SIMILARLY, THE ASSESSE ES CONTENTION THAT SIMPLY BECAUSE ALL THE SHARES HAD BEEN PURCHASED TH E SHARES ON DELIVERY BASIS FROM RECOGNIZED STOCK EXCHANGE THROU GH DEMAT ACCOUNT AND SALE OF SHARES ON DELIVERY BASIS THROUGH DEMAT A/C FROM RECOGNIZED STOCK EXCHANGE LENDS THE ENTIRE ACTIVITY OF PURCHASE AND SHARES A NON-BUSINESS COLOUR IS UNACCEPTABLE. THE AO AFTER ANALYZING THE ISSUE WITH VARIOUS CASE LAWS, HELD TH AT LOOKING AT THE VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF THE TRANSACTIONS OF PURCHASE AND SALE IN SHARES AND MUTUAL FUNDS BY THE ASSESSEE, AND AFTER APPLYING THE RATIO OF THE TESTS AS HAVE BEEN LAID DOWN IN THE AFORESAID CASES, IT CANNOT BE SAID THAT THESE TRANS ACTIONS WERE ENTERED INTO ONLY FOR THE PURPOSE OF INVESTMENT AND THERE WAS NO MOTIVE OF THE ASSESSEE TO EARN PROFIT. ACCORDINGLY, I HAVE NO DOUBT IN MY MIND THAT THE ACTIVITY IN WHICH THE ASSESSEE IS INVOLVED I.E. PURCHASE AND SALE OF SHARES, MUTUAL FUNDS ETC. IN R EALITY, REPRESENTS A TRADE OR BUSINESS, THE PROFITS FROM WHICH ARE ASSESSABLE UNDER THE HEAD BUSINESS INCOME. AGGRIEVED THE ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A) FILED WRITTEN SUBMISSION, WHIC H WAS REPRODUCED BY THE CIT(A) AT PAGES 1 TO 3 OF HIS ORD ER. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CI T(A) ALLOWED THE GROUND OF APPEAL OF THE ASSESSEE BY OBSERVING AS UN DER:- 6. I HAVE CAREFULLY CONSIDERED THE FACTS AND SUBMI SSIONS OF THE APPELLANT AND THROUGH THE MATERIAL BROUGHT ON RECORD AS WELL AS T HE ASSESSMENT THAT THE APPELLANT HAS BEEN INVESTING IN SHARES FOR LAST MANY YEARS TH ESE SHARES ONLY AS AN ITA NO. 1817/MUM/10 RAGHAVENDRA PODDAR 4 INVESTMENT AND ALSO DID TRADING OF SHARES AND OPTIO NS AS ADMITTED BY THE APPELLANT. THE APPELLANT HAS DELIVERY BASED TRADE AS INVESTMEN TS AND SHOWN THE NET GAINS AS CAPITAL GAINS. IT IS ALSO A FACT THAT THE APPELLANT HAS BEEN HOLDING SUCH SHARES BY WAY OF INVESTMENTS AND NOT AS STOCK IN TRADE IN ITS BOOKS OF ACCOUNTS FOR THE LAST MANY YEARS. THE INVESTMENTS IN SHARES ARE CLAIMED O UT OF ITS OWN FUNDS AND NOT ON BORROWED FUNDS. FURTHER, I ALSO FIND FROM STATEM ENT OF AFFAIRS AND DETAILS AND PARTICULARS OF SHARES THAT THE APPELLANT HAS BEEN H OLDING SUCH SHARES AS INVESTMENTS AND SOME OF THESE SHARES SOLD DURING TH E YEAR WERE PERTAINING TO THE SHARES HELD IN EARLIER YEARS. FURTHER FROM THE DETA ILS OF SHORTI TERM CAPITAL GAIN, I FIND THAT MAJORITY OF THESE SHARES WERE SOLD WITHIN A PERIOD RANGING FROM ONE MONTHAND ABOVE AND THE AOS FINDING THAT 95% SHARES WERE HELD FOR HARDLY TWO- THREE DAYS IS FOUND TO BE THUS NOT FACTUALLY CORREC T. FURTHER, I ALSO FIND THAT FOR THE EARLIER YEARS, AS CLAIMED BY THE APPELLANT THAT SUC H PURCHASES SHOWN AS INVESTMENTS HAVE BEEN ACCEPTED BY THE DEPARTMENT AN D THE SHORT TERM CAPITAL GAINS WERE ASSESSED AS SUCH AND AS DECLARED BY THE APPL1ANT, COULD ALSO BE A GROUND FOR ACCEPTING THE SHORT TERM CAPITAL GAINS A S DECLARED BY THE APPELLANT. BUT THE AO WITHOUT BRINGING OUT ANY NEW AND SUBSTANTIAL FACT AS WELL AS MATERIAL ON RECORD IS FOUND HAVING CHANGED HIS OPINION MERELY O N THE GROUND THAT VOLUME FREQUENCY, CONTINUITY AND REGULARITY OF TRANSACTION S IN SALE AND PURCHASE OF SHARES AND MUTUAL FUNDS BY THE ASSESSEE CANNOT BE SAID TO BE TRANSACTIONS ENTERED INTO ONLY FOR THE PURPOSE OF INVESTMENT AND THERE WAS N O MOTIVE OF THE ASSESSEE TO EARN PROFIT AND HE HAS NO DOUBT THAT SUCH ACTIVITY IN REALITY REPRESENTS A TRADE OR BUSINESS, THE PROFITS FROM WHICH ARE ASSESSABLE UND ER THE HEAD BUSINESS INCOME. BUT THE APPELLANT IN THE ABOVE SUBMISSIONS, HAS CON TENDED THAT MERELY ON FMDING THAT SOME OF THE SHARES ARE HELD FOR A SHORTER PERI OD AND IGNORING THE FACT THAT THE ASSESSEE HAS CONTINUED TO HAVE INVESTMENTS OVER THE YEARS AND DUE TO THE VOLATILITY OF MARKET, A FREQUENCY OF SALES TAKEN PLACE MORE AC TIVELY DURING THE YEAR, MERELY ON THE BASIS OF VOLUME AND FREQUENCY OF TRANSACTION OF SOME SCRIPTS CANNOT BE USED AS SWEEPING YARDSTICK TO CONSIDER THE WHOLE OF THE ACTIVITIES AS TRADING. I FIND CONSIDERABLE FORCE IN THIS CONTENTION OF THE APPELL ANT WHICH ALSO FINDS SUPPORT FROM THE DECISION OF HONBLE ITAT A BENCH, MUMBAI IN THE CASE OF ASHWINKUMAR K. KAPADIA VS. ITO 14(3)-3 WHO VIDE THE IR ORDER ITA NO. 7053/M/2007 DATED 10.08.2009 ON SIMILAR FACT AND IS SUE HAVE HELD THAT ONCE HAVING ACCEPTED THE TRANSACTIONS ARE PART OF INVEST MENT ACTIVITY IN THE EARLIER YEARS, REVENUE IS NOT ENTITLED TO TAKE A DIFFERENT VIEW IN THE SUBSEQUENT YEAR WHEN THE NATURE OF TRANSACTION IS THE SAME. THUS, I FIN D SUBSTANTIAL FORCE IN THE ARGUMENTS OF THE THAT THE MAGNITUDE OF VOLUME AND F REQUENCY OF INVESTMENT WILL NOT BE FACTOR ABOUT THE NATURE OF TRANSACTION. MORE OVER, JUST BECAUSE SOME INVESTMENTS ARE MADE FOR A SHORT PERIOD THE SALE WI LL NOT LOOSE ITS BASIC OF INVESTMENT. FURTHER, AS PER INCOME-TAX ACT, ONE YEA RS HOLDING IS AS LONG PERIOD FOR EQUITY INVESTMENT. IN CASE OF ASSETS, OTHER THA N SHARES IF HELD FOR A PERIOD LESS THAN 36 MONTHS, THE SAME IS CONSIDERED AS SHORT TER M ASSETS BUT IN THE CASE OF SHARES THIS LIMIT IS SUBSTANTIALLY LOWER I.E. ONLY ONE YEAR. THUS, INVESTMENT IN ITA NO. 1817/MUM/10 RAGHAVENDRA PODDAR 5 SHARES MADE BY THE ASSESSEE, IF IT IS TRANSFERRED O R SOLD EVEN WITHIN 2-3 DAYS, THE TRANSFER OF SHARES WIFI NOT CHANGE THE CHARACTER OF INVESTMENT. FURTHER, AS HELD BY THE HONBLE ITAT, MUMBAI G BENCH IN THE CASE OF J CIT VS. GOPAL PUROHIT THAT DELIVERY BASED TRANSACTIONS SHOULD BE TREATED AS O F THE NATURE OF INVESTMENT TRANSACTIONS AND PROFIT THEREFROM SHOULD BE TREATED AS STCG OR LTCG DEPENDING UPON THE PERIOD OF HOLDING, EMPLOYMENT OF AN INFRAS TRUCTURE, SO AS TO KEEP A TRACK OF DEVELOPMENTS IN THE SHARE MARKET CANNOT TERM AS AN INVESTMENT ACTIVITY INTO A BUSINESS ACTIVITY. IN THE CASE OF APPELLANT ALSO, T HERE WAS A DELIVERY BASED TRANSACTIONS IN RESPECT OF SHARES, THEREFORE, THE P ROFIT THERE FROM SHOULD BE TREATED AS SHORT TERM CAPITAL GAIN AS AGAINST THE TREATMENT GIVEN BY THE AO AS BUSINESS INCOME. THEREFORE, I FIND THAT THE AO WAS NOT JUSTI FIED IN CHANGING THE HEADS OF INCOME IN THE CASE OF THE APPELLANT. ACCORDINGLY, T HE AO IS DIRECTED TO TREAT THE AMOUNT OF RS. 25,77,287/- AS SHORT TERM CAPITAL GA INS AND NOT AS BUSINESS INCOME. THIS GROUND IS, THEREFORE, DECIDED IN FAVO UR OF THE APPELLANT. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US. 6. BEFORE US, THE LEARNED DR SUBMITTED THAT THE ASS ESSEE IS BUYING AND SELLING OF SHARES ON DAY-TO-BASIS AND THE HOLDI NG OF THE SHARES IS ONLY FOR 2/3 DAYS. HE FURTHER SUBMITTED THAT THE VO LUME OF SHARES SHOWN BY THE ASSESSEE UNDER THE HEAD SHORT TERM CA PITAL GAIN WAS 7,55,235 AND NO DIVIDEND INCOME WAS RECEIVED BY THE ASSESSEE AND ALSO THERE IS A SPECULATION LOSS. HE CONTENDED THAT THE ASSESSEE IS DOING BUYING AND SELLING OF SHARES ON REGULAR BASIS , THEREFORE, THE ASSESSEE IS A TRADER AND NOT INVESTOR. HE SUBMITTED THAT THE CASE LAW RELIED UPON BY THE CIT(A) IN THE CASE OF GOPAL PURO HIT HAS NO APPLICATION TO THE FACTS OF THE CASE OF THE ASSESSE E. 7. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT NO BORROWING FUNDS WERE UTILIZED FOR THE PURPOSE OF INVESTMENT IN SHARES. HE POINTED OUT THAT IN THE EA RLIER YEAR THE INCOME SHOWN UNDER THE HEAD SHORT-TERM CAPITAL GAI N WAS ACCEPTED BY THE AO. HE, THEREFORE, RELIED UPON THE ORDER OF THE CIT(A). ITA NO. 1817/MUM/10 RAGHAVENDRA PODDAR 6 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REC ORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE IS SUE INVOLVED IN THIS IS WHETHER THE ACTIVITY OF THE ASSESSEE IN PURCHASI NG AND SELLING OF SHARES, MUTUAL FUNDS, ETC REPRESENTS INVESTMENT ACT IVITY OR BUSINESS ACTIVITY AND THE PROFITS DERIVED FROM WHICH ARE ASS ESSABLE UNDER THE HEAD BUSINESS INCOME OR NOT ? THE AO GAVE FINDING T HAT THE HUGE VOLUME OF SHARES HAVE BEEN PURCHASED AND SOLD BY TH E ASSESSEE HIMSELF AND THE HIGH FREQUENCY OF SUCH TRANSACTIONS AS WELL AS LOW HOLDING PERIOD AS BROUGHT OUT BY THE FACT THAT MORE THAN 95% OF THE TOTAL NUMBER OF SHARES WERE SOLD WITHIN 2/3 DAYS. HE ALSO OBSERVED THAT THE TRANSACTIONS IN QUESTION ARE NOT ISOLATED ONES, RATHER THERE IS A REGULARITY IN THESE TRANSACTIONS AS THE ASSESSEE HAS BEEN CARRYING ON SUCH TRANSACTIONS DURING EARLIER YEARS AND AN IN TENTION TO CONTINUE THESE TRANSACTIONS IN FUTURE IS ALSO APPAR ENT. THE CIT(A) HELD THAT THE MAJORITY OF SHARES WERE SOLD WITHIN A PERIOD RANGING FROM ONE MONTH AND ABOVE AND THE AOS FINDING THAT 95% SHARES WERE HELD FOR HARDLY TWO THREE DAYS. IN VIEW OF THE ABOV E FINDING OF THE CIT(A) CONTRADICTING THE FINDING GIVEN BY THE AO, T HE BENCH ASKED THE LEARNED COUNSEL FOR THE ASSESSEE WHAT WAS THE BASIS OF THE FINDING OF THE CIT(A) AND ANY MATERIAL WAS AVAILABLE ON RECORD TO SUBSTANTIATE THE ABOVE FINDING OF THE CIT(A). THE LEARNED COUNSE L FOR THE ASSESSEE WAS NOT ABLE TO PRODUCE ANY MATERIAL TO SUBSTANTIAT E THE FINDING OF THE CIT(A) THAT THE MAJORITY OF THE SHARES WERE HEL D FOR A PERIOD OF MONTH AND ABOVE. THE AO GAVE A SPECIFIC FINDING DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS AFTER THE DETAILS FURNISHED BY THE ASSESSEE THAT MORE THAN 95% OF THE SHARES WERE HELD HARDLY W ITHIN 2/3 DAYS AND THE ASSESSEE HAS MADE HUGE TRANSACTIONS AND MOS T OF THE TRANSACTIONS HELD BY THE ASSESSEE FOR ONLY 2/3 DAYS . THE CIT(A) GAVE A FURTHER FINDING THAT THE ASSESSEE HAS NOT BORROWED ANY FUND MERELY BECAUSE VOLUME, FREQUENCY, CONTINUITY AND REGULARI TY OF TRANSACTIONS IN SALE AND PURCHASE OF SHARE AND MUTUAL FUNDS BY T HE ASSESSEE ITA NO. 1817/MUM/10 RAGHAVENDRA PODDAR 7 CANNOT BE SAID TO BE TRANSACTIONS ENTERED INTO ONLY FOR THE PURPOSE OF INVESTMENT AND THERE WAS NO MOTIVE OF THE ASSESSEE TO EARN PROFIT AND HE HAS NO DOUBT THAT SUCH ACTIVITY REALITY REPRESEN TS A TRADE OR BUSINESS, THE PROFITS FROM WHICH ARE ASSESSABLE UND ER THE HEAD BUSINESS INCOME. THE CIT(A) ALSO GAVE A FINDING THA T IN THE PREVIOUS YEAR THE AO HAS ACCEPTED THE SHORT TERM CAPITAL GAI N DECLARED BY THE ASSESSEE. IN OUR CONSIDERED OPINION, THE VOLUME, FR EQUENCY, CONTINUITY AND REGULARITY OF TRANSACTIONS IN SALE A ND PURCHASE OF SHARE AND MUTUAL FUNDS ARE MATERIAL ASPECTS TO DECI DE WHETHER THE ASSESSEE IS AN INVESTOR OR A TRADER. SIMPLY BECAUSE THE ASSESSEE HAS NOT BORROWED THE FUNDS, ON THIS BASIS ALONE, CANNOT BE SAID THAT THE ASSESSEE IS AN INVESTOR. AS REGARDS ACCEPTING THE S HORT-TERM CAPITAL GAINS IN EARLIER YEAR IS CONCERNED, THE HONBLE SUP REME COURT IN THE CASE OF NEW JEHANGIR VAKIL MILLS CO. LTD. VS. CIT, 49 ITR 137 HAS HELD THAT IN THE CIRCUMSTANCES THAT IN THE EARLIER ASSESSMENT YEARS, THE ASSESSEE WAS TREATED AS INVESTOR DID NOT ESTOP THE AO FROM CONSIDERING, FOR THE PURPOSE OF COMPUTATION OF PRO FITS FOR SUCCEEDING YEAR AS TO WHEN THE TRADING ACTIVITIES O F THE ASSESSEE IN SHARES BEGAN . IN VIEW OF THE ABOVE JUDGMENT OF THE HONBLE SUPREME COURT, IN OUR CONSIDERED OPINION, BY CONSID ERING VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF TRANSACTION S IN SALE AND PURCHASE OF SHARE AND MUTUAL FUNDS, THE AO HAS RIGH TLY TREATED THE PROFITS DERIVED FROM THE ABOVE TRANSACTIONS AS BUSI NESS INCOME. IN SO FAR AS THE CASE LAWS RELIED UPON BY THE CIT(A) IN T HE CASE OF GOPAL PUROHIT VS. JCIT, 122 TTJ(MUM.)87, THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE PRESENT CASE, THE AO AFTER CONSIDERING THE FACTS THAT I) VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF TRANSACTIONS IN SALE AND PURCHASE OF SHARE AND MUTU AL FUNDS, II) NO DIVIDEND INCOME RECEIVED BY THE ASSESSEE, AND III) THERE IS A SPECULATIVE LOSS, HAS TREATED THE INCOME OF THE ASS ESSEE AS BUSINESS ITA NO. 1817/MUM/10 RAGHAVENDRA PODDAR 8 INCOME. IN VIEW OF THE ABOVE FINDINGS, WE SET ASIDE THE ORDER OF THE CIT(A) AND UPHOLD THE ORDER PASSED BY THE AO. 9. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF DECEMBER, 2011. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23 RD DECEMBER, 2011. KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, D BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.