Padmavathi Dhareppa Uppar, Bengaluru V. Assistant Commissioner Of Income Tax, Circle- 6(3)(1), Bengaluru

ITA 1962/BANG/2019

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 8682 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 12-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KANNAN NARAYAN
• Assessee Lawyers: OMPRAKASH JAIN
• Keywords: Business income; Date of conversion; Capital Gains
• Section: 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.1962/BANG/2019 ASSESSMENT YEAR : 2015 16 PADMAVATHI DHAREPPA UPPAR, 148/6-1, 5 TH CROSS, RMV EXTENSION, SADASHIVNAGAR, BENGALURU-560 080. PAN AAWPU 7509 E VS. THE ASST. COMMISSIONER INCOME TAX, CIRCLE-6(3)(1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI OMPRAKASH JAIN, C.A RESPONDENT BY : SHRI KANNAN NARAYAN, JCIT (DR) DATE OF HEARING : 07 - 12 - 2020 DATE OF PRONOUNCEMENT : 18 - 12 - 2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL IS FILED BY ASSESSEE AGAINST ORDER DTAED25/07/2019, PASSED BY LD.CIT(A)-6 FOR ASSESSME NT YEAR 2015-16 ON FOLLOWING GROUNDS OF APPEAL: 1. THE ORDERS OF THE LEARNED LOWER AUTHORITIES ARE BAD IN LAW AND CONTRARY TO THE ACT, RULES NOTIFICATIONS AND CIRCULARS AS IS SUED FROM TIME TO TIME. 2. THE LEARNED ASSESSING OFFICER ERRED IN CHANGING THE HEAD OF INCOME WITHOUT TAKING NATURE OF TRANSACTIONS, HISTORY OF A SSESSEE, TREATMENT DONE BY ASSESSEE IN THE BOOKS. ALSO LD A.0 HAS MISS ED THE SETTLED POSITION OF TREATMENT OF BI.THINESS INCOME VIS A VI S CAPITAL GAINS AS EXPLAINED IN CBDT CIRCULAR NO 6/2016, NO. 1827 DATE D AUG 31 1989, NO 4 OF 2007 WHERE A CLEAR GUIDELINES TO FOLLOW TO DIFFERENTIATE TRADER FROM INVESTOR. THE LATEST BEEN NO 6/ 2016 CLEARLY S PELLS THE TREATMENT OF PORTFOLIO FOR A BUSINESSMAN AND AN INVESTOR. 3. THE LEARNED CIT(A) WITHOUT PREJUDICE TO THE ABOVE G ROUND, HAS ERRED IN UPHOLDING THE ORDER PASSED BY THE LD ASSESSING O FFICER WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS AND THE EVIDENC ES SUBMITTED THEREWITH. 4. THE APPELLANT CRAVES LEAVE TO ADD ANY OTHER GROUND OR MODIFY OR REVISE THE GROUNDS TAKEN AT THE TIME OF HEARING BEFORE THE HON'BLE INCOME-TAX APPELLATE TRIBUNAL, BANGALORE. BRIEF FACTS OF THE CASE ARE AS UNDER: 2.ASSESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME FOR YEAR UNDER CONSIDERATION ON 31/10/2015 DECLARING TOTAL I NCOME OF RS.2,99,50,400/- FROM OTHER SOURCES AND CAPITAL GAI NS. THE CASE WAS SELECTED FOR LIMITED SCRUTINY FOR VERIFICATION OF SHORT TERM CAPITAL GAINS. NOTICE UNDER SECTION 143 (2) AND 142 (1) WER E SERVED ON ASSESSEE. IN RESPONSE TO STATUTORY NOTICES, REPRESE NTATIVE OF ASSESSEE FILED REQUISITE DETAILS AS CALLED FOR. 2.1LD. AO ON PERUSAL OF DETAILS FILED, WAS OF THE O PINION THAT ASSESSEE WAS TRADING IN SHARES. LD. AO NOTED THAT T HERE WERE INTRADAY TRANSACTIONS, TAKING INTO ACCOUNT FREQUENC Y OF TRANSACTION AND DURATION OF HOLDING. LD. AO THUS CALLED UPON AS SESSEE TO ESTABLISH WHY ASSESSEE SHOULD NOT BE TREATED AS A T RADER AND INCOME FROM SUCH SHARE TRANSACTION AS BUSINESS INCO ME. IN RESPONSE TO LD. AOS PROPOSITION, REPRESENTATIVE OF ASSESSEE SUBMITTED THAT ASSESSEE HAD UNDERTAKEN THE TRANSACT ION IN HER OWN NAME AND THAT SHE HAD BOUGHT AND SOLD THE SHARES IN BSE/NSE THROUGH A BROKER. IT WAS SUBMITTED THAT ASSESSEE HA D TREATED ALL THE SHARES TRADED AS INVESTMENTS AND THAT SHE HAD RECOR DED THE SAME AT COST PRICE IRRESPECTIVE OF THE MARKET LOSSES. 2.2LD.AO REJECTED ASSESSEES SUBMISSION AND COMPUTE D NET GAIN OF RS.1,67,96,666/- AFTER ALLOWING EXPENSES OF RS.11,7 9,170/-AND PURCHASE PRICE OF RS.133,17,47,947/- AS APPELLANTS BUSINESS INCOME. 3.AGGRIEVED BY ORDER OF LD. AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A). 3.1LD. CIT (A) ASKED ASSESSEE TO FILE DETAILS OF DI VIDEND EARNED ON SHARES, SALE OF WHICH HAD RAISED RESULTED IN CAPITA L GAINS. ASSESSEE SUBMITTED SCRIPT WISE COMPUTATION OF SHORT TERM CAP ITAL GAIN FROM. FROM THE DETAILS FILED BY ASSESSEE, LEARNT CIT (A) OBSERVED AS UNDER: 4..................... FROM THE SAME IT IS SEEN THAT THERE WORE IN ALL 65 TRANSACTION, OF WHICH 8 TRANSACTIONS RELATED TO PURCHASE OF 3,64,05 3 SHARES OF CAIRN INDIA WHICH WERE HELD BY THE APPELLANT AND NO T SOLD DURING F. Y. 2014-15. THE AVERAGE PERIOD OF HOLDING OF THE OTHER SHARES WAS 32 DAYS OR APPROXIMATELY ONE MONTH. IN S OME CASES EXAMPLES RELIANCE LIQUID FUND, ITC, CANARA BANK, CE NTURY TEXTILES AND NCC, THE PERIOD OF HOLDING RANGES BETWEEN ONE D AY AND 7 DAYS. THIS IS APART FROM THE INTRADAY TRADING AT NS E FEATURES AS OBSERVED BY THE AO WHICH RESULTED IN LOSSES TO THE APPELLANT. THE LONGEST PERIOD OF FOLDING IS 133 DAYS AND THERE ARE ONLY 2 TRANSACTIONS IN SHARES OF UNITECH LTD WHICH WERE HE LD FOR THAT LENGTH OF TIME. IT WAS ALSO SUBMITTED THAT THE APPE LLANT HAD HERSELF CHANGED FROM AN INVESTOR INTO A TRADER FROM THE NEXT FINANCIAL YEAR AND W.E.F. 01/04/2015 THE SHARES HEL D BY THE APPELLANT WERE CONVERTED INTO HER STOCK IN TRADE. I T WAS START STATED THAT THE LOSSES INCURRED ON THE PURCHASE AND SALE OF SHARES OF CAIRN INDIA WERE TREATED AS CAPITAL LOSS TILL THE DATE OF CONVERSION AND THE LOSSES INCURRED AFTER THAT DATE WERE TREATED AS BUSINESS LOSS AND THE SAME HAD BEEN ACCEPTED IN THE SCRUTINY ASSESSMENT FOR THE FOLLOWING ASSESSMENT YE AR THAT IS 2016-17. 3.2BASED ON THE SUBMISSIONS MADE BY ASSESSEE AND AB OVE OBSERVATIONS BY LD.CIT(A) ASSESSEE WAS CONSIDERED T O BE A TRADER RATHER THAN EXIST DUE TO THE FREQUENCY OF TRANSACTI ONS AND PERIOD OF HOLDING. LD.CIT(A) CATEGORICALLY OBSERVED THAT CERT AIN SCRIPTS WERE HELD BY ASSESSEE FOR QUITE SHORT PERIOD OF ALMOST L ESS THAN 10 DAYS AND IN CASE OF NSE FUTURES, LESS THAN A DAY. LD.CIT (A) ALSO NOTED THAT ASSESSEE HAD EARNED DIVIDEND OF RS.1,00,400/-F ROM IFCL LTD. 3.3LD.CIT(A) ALSO NOTED THAT THE SHARES OF CARRY IN INDIA WAS HELD BY ASSESSEE FOR MORE THAN ONE YEAR AS A DIVIDEND WAS D ECLARED ON 23/04/2015. SUBSEQUENTLY ASSESSEE SOLD HER SHARES I N CARRY IN INDIA IN JUNE 2015, BEFORE THE EFFECTIVE DATE OF DI VIDEND DISTRIBUTION WHICH WAS 08/07/2015. LD.CIT(A) THUS CONCLUDED THAT ASSESSEE HAD NOT PURCHASED THE SHARES WITH THE INTENTION OF INVESTMENT BUT FOR EARNING DIVIDEND THERE ON. LD. CIT (A) UPHELD T HE ADDITION MADE BY LD. AO BY OBSERVING AS UNDER: 7. IN THE APPELLANTS CASE, THE VALUE OF TRANSACTI ON IS USED, UP WORDS OF RS. 1 33 CRORES. PER BALANCE SHEET ALSO SH OWS BORROWINGS IN THE FORM OF UNSECURED LOANS OF RS. 3. 76 CRORES FROM A FAMILY MEMBER D.Y.UPPAR. AS DISCUSSED ABOVE, THE PERIOD OF FOLDING IS RELEVANT TO BILLY SHORT, A MON TH ON AVERAGE AND IN SOME CASES LESS THAN 10 DAYS. THE APPELLANT HAS ALSO NOT EARNED SIGNIFICANT DIVIDEND FROM INVESTMENTS. T AKING THE TOTALITY OF FACTS INTO ACCOUNT, THE AOS ACTION IN TREATING HER TRANSACTION AND SHARES AS TRADING AND THE PROPHETS THEREON AS BUSINESS INCOME IS UPHELD. 4.AGGRIEVED BY ORDER OF LD.CIT(A), ASSESSEE IS IN A PPEAL BEFORE US NOW. 4.1LD.AR SUBMITTED THAT PURCHASE AND SALE OF SHARES WERE INCIDENTAL AND OCCASIONAL AND IT WAS NOT A REGULAR TRADE. HE SUBMITTED THAT ASSESSEE SO PURCHASED AND SOLD SHARE S ONLY 3 TO 4 DAYS IN A MONTH AND WAITED FOR THE SCRIPT TO APPREC IATE AND THEN EXIT. IT HAS BEEN SUBMITTED THAT ASSESSEE TOOK DELI VERY OF STOCKS BROUGHT THROUGH HER DPE AND THEN SOLD. THE AVERAGE HOLDING PERIOD IS NOT LESS THAN 30 DAYS WHICH DP STATEMENT CAN FUR THER SUBSTANTIATE WITH. THE LD. AR PLACED RELIANCE ON TH E CBDT CIRCULAR NO. 6/2016, NO. 1827 DATED 31/08/1989, CBDT CIRCULA R NO. 4 OF 2007 WHERE A CLEAR GUIDELINES TO FOLLOW TO DIFFEREN TIATE TRADER FROM INVESTOR HAS BEEN LAID OUT. HE SUBMITTED THAT THE L ATEST CIRCULAR NO. 6/2016 CLEARLY SPELLS THE TREATMENT OF PORTFOLIO FO R A BUSINESSMAN AND AN INVESTOR AND THAT ASSESSEE HAD INVESTED IN T HE STOCKS WITH THE SOLE INTENT OF CAPITAL APPRECIATION AND DIVIDEN D INCOME ON SUCH INVESTMENTS WHICH ARE ASCERTAINED ABLE BY PORTFOLIO HELD BY HER. LD. AR SUBMITTED THAT ASSESSEE HAD TREATED THE HOLDINGS IN THE BOOKS AS A TYPICAL INVESTOR WHERE IRRESPECTIVE OF MARKET LOSSES SHE HAS RECORDED THE SAME AT COST PRICE. IT WAS ALSO SUBMIT TED THAT ASSESSEE HAD FOLLOWED ACCOUNTING STANDARD 13 FOR INVESTMENTS ISSUED BY ICAI. TAKING SUPPORT OF CIRCULAR NO. 6/2016 PARA 3( A), LD.AR STATED THAT ASSESSEE HAS DECLARED THE SHARES AS INVESTMENT . HE THUS EMPHASISED THAT ASSESSEE HAS TO BE TREATED AS AN IN VESTOR AND THE AUTHORITIES BELOW WERE WRONG IN TREATING ASSESSEE A S A TRADER. 4.2LD.SR.DR ON THE CONTRARY, SUBMITTED THAT INTENTI ON OF ASSESSEE WAS TO EARN PROFITS FROM SALE AND PURCHASE OF SHARE S. HE SUBMITTED THAT IT WAS INVOLVING VARIOUS SCRIPT, THE MAGNITUDE OF TRANSACTION OF SALE AND PURCHASE WAS LARGE WITH TURNOVER OF RS.133 CRORES. THE DETAILS OF PURCHASE AND SALE OF SCRIPTS DURING THE RELEVANT YEAR IS PLACED AT PAGE 30 OF PAPER BOOK. HE SUBMITTED THAT ONLY INCOME GENERATED BY ASSESSEE SHOWN IN PROFIT AND LOSS ACCO UNT AS INCOME FROM OPERATIONS, IS PROFIT FROM DEALING IN SECURITI ES. HE FURTHER SUBMITTED THAT PROFIT AND LOSS STATEMENT FOR YEAR E NDED 31/03/2015 AT PAGE 27 READ WITH PAGE 19 OF PAPER BO OK, REVENUE RECOGNITION IS CATEGORISED UNDER 3 HEADS BEING: SALE OF SHARES AMOUNTING TO RS.1,33,29,27,117/-; BROKERAGE INCOME AMOUNTING TO RS.7,09,736/- DIVIDEND INCOME FROM IFCL INTEREST INCOME FROM FIXED DEPOSIT AND SB BACK ACCO UNT AMOUNTING TO RS.1,25,54,395/-. 4.3LD.SR.DR SUBMITTED THAT THE FREQUENCY AND THE PE RIOD DURING WHICH ASSESSEE PURCHASED AND SOLD SHARES, CLEARLY L EADS TO THE INTENTION THAT THESE WERE NOT ORDINARILY PURCHASES AND SALES MADE BY ASSESSEE. INSTEAD THERE WAS AN OBJECT TO DERIVE INCOME BY WAY OF PROFITS. EMPHASISING ON THE BASIC NATURE OF SHARE T RADING ACTIVITY CONDUCTED BY ASSESSEE IT WAS SUBMITTED THAT INCOME DERIVED BY ASSESSEE FROM SUCH HUGE MAGNITUDE OF SALE AND PURCH ASE OF SHARES CANNOT BE CONSIDERED TO BE CAPITAL GAINS MERELY BEC AUSE ASSESSEE HAS VALUED THE SHARES AT COST. 4.4HE SUBMITTED THAT ASSUMING ASSESSEE HAS INVESTED IN THESE SHARES IS NOT SUPPORTED BY THE ACCOUNT STATEMENTS A S THERE ARE NO SEPARATE BOOKS OF ACCOUNTS MAINTAINED BY ASSESSEE F OR THE PURPOSES OF INVESTMENT IN SHARES AS WELL AS SHARES HELD AS STOCK IN TRADE. IT WAS SUBMITTED THAT, WHAT IS HELD AS CLOSI NG STOCK DURING THE YEAR UNDER CONSIDERATION IS ONLY 364053 SHARES OF CAIRN INDIA LTD, PURCHASED BY ASSESSEE ON VARIOUS DATES ON 28/0 7/2014, 08/10/2014 TO 11/12/2014. EVEN IN RESPECT OF CAIRN INDIA LTD ASSESSEE ON 28/07/2014 PURCHASED 96554 SHARES AND 6 2446 SHARES FOR SUM OF RS.3,04,20,916/- AND RS.1,96,74,6 3/-. THESE SHARES WERE WAS SOLD BY ASSESSEE ON 01/09/2014 AND 02/09/2014 FOR SALE CONSIDERATION OF RS.3,19,59,374/- AND RS.2 ,07,94,518/-. FURTHER ON 01/12/2014 PURCHASED 2000 SHARES AT A PR ICE OF RS.3,76,00,000/- AND SOLD 2000 SHARES ON THE SAME D ATE AT SALE PRICE OF RS.3,76,08,100/-. LD. DR SUBMITTED THAT EV EN THE SHARES CANNOT BE CONSIDERED TO HAVE BEEN PURCHASED BY ASSE SSEE AS AN INVESTMENT IN THE MANNER IN WHICH THEY HAVE BEEN PU RCHASED AND SOLD. 4.5LD.SR.DR VEHEMENTLY OPPOSED THE ARGUMENT THAT AS SESSEE CONVERTED ITSELF TO BE AN INVESTOR IN THE SUBSEQUEN T FINANCIAL YEAR STARTING FROM 01/04/2015 WHEREIN THE ALLEGED INVEST MENT IN CARRY ON INDIA LIMITED WAS CONVERTED INTO STOCK IN HAND W HICH WAS SUBSEQUENTLY SOLD BY ASSESSEE IMMEDIATELY AFTER THE DIVIDEND WAS DECLARED. 4.6HE THUS SUPPORTED THE OBSERVATIONS OF AUTHORITIE S BELOW OF CONSIDERING THE PROFITS EARNED FROM SALE PURCHASE O F SHARES DURING THE YEAR UNDER CONSIDERATION TO BE A BUSINESS INCOM E. 5.WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. 5.1WHETHER A PERSON DEALING WITH SHARES HAS MADE AN INVESTMENT OR HAS TREATED THEM AS STOCK-IN-TRADE, HAS BEEN THE SUBJECT-MATTER OF CONSIDERABLE DEBATE. IT IS A MATTER OF INTENTION OF THE ASSESSEE, WHICH HAS TO BE GATHERED FROM HIS CONDUCT AND SURRO UNDING CIRCUMSTANCES. VARIOUS PARAMETER/CRITERIA HAVE BEEN ELUCIDATED AND EXPLAINED, HOWEVER A PRAGMATIC AND COMMON SENSE APPROACH NEEDS TO BE ADOPTED, TO DETERMINE KEEPING IN MIND C OMMERCIAL CONSIDERATIONS. 5.2WE HAVE GONE THROUGH COMPARATIVE PROFIT AND LOSS AT PAGE 19- 30 OF PAPER BOOK. ON PERUSAL OF PAGE 30, IT IS OB SERVED THAT ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD PU RCHASED SHARES AMOUNTING TO RS.1,31,49,51,280/-, WHICH INCL UDES PURCHASE OF SHARES IN CAIRN INDIA LTD., AS IS CLEAR FROM PAG E 30 OF PAPER BOOK RELIED BY LD.DR. WE NOTE THAT ASSESSEE DURING THE Y EAR UNDER CONSIDERATION HAS PURCHASED SHARES AMOUNTING TO RS.1,33,29,27,115/-, WHICH INCLUDES SALE OF SHARES OF CAIRN INDIA LTD. IT IS OBSERVED THAT, MANY SHARES WERE PURCHASE D AND SOLD IN MAGNITUDES. EVEN IN RESPECT OF CAIRN INDIA LTD, WE NOTE THAT ASSESSEE TRIED TO MAXIMISE HER PROFITS BY PURCHASIN G THE SHARES ON THE SAME DATE IT DIFFERENT PRICES WHICH WERE SUBSEQ UENTLY SOLD ON DIFFERENT DATES THEREBY AVERAGING THE COSTS. AS ON 31/03/2015, ASSESSEE ONLY HAD 364053 SHARES OF CAIRN INDIA LTD WAS ONLY REFLECTED AS CLOSING STOCK. NONE OF THE OTHER SCRIP TS SHOWN AT PAGE 30 APPEARS IN THE BALANCE SHEET AS ON 31/03/15. THE STATEMENT ALSO REVEALS THAT ASSESSEE UNDERTOOK INTRA-DAY TRAN SACTION. 5.3IT IS OBSERVED THAT THESE SCRIPTS HAVE NOT BEEN HELD BY ASSESSEE EVEN FOR SUBSTANTIAL PERIOD OF TIME WHICH IS ALLEGE D TO BE MADE FOR INVESTMENT PURPOSES. 5.4HONBLE SUPREME COURT IN CIT V. ASSOCIATED INDUSTRIAL DEVELOPMENT CO. (P.) LTD. [1971] 82 ITR 586 , OBSERVED THAT: WHETHER A PARTICULAR HOLDING OF SHARES IS BY WAY O F INVESTMENT OR FORMS PART OF THE STOCK-IN-TRADE IS A MATTER WHI CH IS WITHIN THE KNOWLEDGE OF THE ASSESSEE WHO HOLDS THE SHARES AND IT SHOULD, IN NORMAL CIRCUMSTANCES, BE IN A POSITION TO PRODUCE E VIDENCE FROM ITS RECORDS AS TO WHETHER IT HAS MAINTAINED ANY DIS TINCTION BETWEEN THOSE SHARES WHICH ARE ITS STOCK-IN-TRADE A ND THOSE WHICH ARE HELD BY WAY OF INVESTMENT. 5.5FROM THE CHART PLACED AT PAGE 30, IT IS CLEAR TH AT ASSESSEE PURCHASED AND SOLD SCRIPTS ALLEGED TO HAVE BEEN HEL D AS INVESTMENT WITHIN SMALL INTERVALS AND MAGNITUDE OF PURCHASES O N EACH DATE IS VERY HIGH RESULTING IN HUGE TURNOVER. IT IS ALSO NO TED THAT ASSESSEE DID NOT TRANSACT BETWEEN APRIL TO MAY AND AUGUST 20 14, AND MERELY BECAUSE ASSESSEE DID NOT TRANSACT DURING THESE MONT HS, DOES NOT ESTABLISH THAT THESE WERE INVESTMENTS IN THE HANDS OF ASSESSEE. LD.AR ARGUED BEFORE US THAT ASSESSEE SHOULD BE TREA TED AS AN INVESTOR FOR THE SIMPLE REASON THAT SHE HAD CONSIDE RED THE CLOSING STOCK AT COST. HOWEVER WE NOTE THAT THE ONLY SCRIPT THAT WAS HELD TO BE AS CLOSING STOCK WAS IN CASE OF CAIRN INDIA LTD. 5.6IN OUR CONSIDERED OPINION FREQUENCY, VOLUME OF P URCHASE AND SALE OF SHARES AND THE PROFIT EARNED BY ASSESSEE ON SALE OF SUCH SHARES WITHIN A SHORT PERIOD OF TIME SHOWS, INTENTI ON OF ASSESSEE WAS TO GENERATE INCOME THROUGH TRADE, RATHER THAN I NVEST IN THEM. 5.7HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS D&M COMPONENTS LTD REPORTED IN 364 ITR 179 HAD OBSERVED AS UNDER: 18. WE FIND THE HONBLE DELHI HIGH COURT IN THE CA SE OF D & M COMPONENTS LTD. (SUPRA) WHILE DECIDING A SOMEWHAT I DENTICAL ISSUE HAS HELD THAT WHERE THERE WAS SHORT DURATION OF HOL DING OF SHARES AND LACK OF CLARITY IN ACCOUNT BOOKS, SALE AND PURC HASE OF SHARES WOULD LEAD TO BUSINESS INCOME AND NOT SHORT TERM CA PITAL GAINS. THE VARIOUS OTHER DECISIONS RELIED BY THE LD. COUNSEL F OR THE ASSESSEE ALSO SUPPORTS HIS CASE THAT THE PROFITS IN THE INSTANT C ASE OF PURCHASE AND SALE OF SHARES WOULD AMOUNT TO BUSINESS INCOME AND NOT SHORT TERM CAPITAL GAIN AS HELD BY THE ASSESSING OFFICER. IN T HIS VIEW OF THE MATTER, WE SET-ASIDE THE ORDER OF THE LD.CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF BUSINESS IN COME ON ACCOUNT OF PROFIT ON SALE OF SUCH SHARES. 5.8BASED UPON THE ABOVE FACTUAL OBSERVATIONS WE DO NOT AGREE WITH LD.AR IN CONSIDERING INCOME GENERATED FROM SALE OF THESE SHARES AS CAPITAL GAIN INSTEAD OF INCOME FROM BUSINESS. W E THEREFORE DO NOT FIND ANY INFIRMITY IN VIEW TAKEN BY LD.CIT(A), AND THE SAME IS UPHELD. ACCORDINGLY GROUNDS RAISED BY ASSESSEE STANDS DISMI SSED. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS DISMI SSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DEC, 2020 SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 18 TH DEC, 2020. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR - 12 - 2 0 20 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER - 12 - 2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. - 12 - 2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS - 12 - 2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON - 12 - 2020 SR.PS 7. SIGNED ORDER COMES BACK TO SR.PS/PS - 12 - 2020 SR.PS 8. DATE OF UPLOADING THE ORDER ON WEBSITE - 12 - 2020 SR.PS 9. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 10. FILE SENT TO THE BENCH CLERK - 12 - 2020 SR.PS 11. DATE ON WHICH FILE GOES TO THE AR 12. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 13. DATE OF DISPATCH OF ORDER. 14. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS