ACIT 21(1), MUMBAI V. POOJA MANU GOEL, MUMBAI

ITA 5416/MUM/2013

• Counselvise Citation: 541619914 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 24-06-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 07-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: R C JAIN
• Keywords: Business income
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, M UMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND VIVEK VARMA, (JM) . . , , ./I.T.A. NO.5007/MUM/2013 ( / ASSESSMENT YEAR : 2010-11) SMT.POOJA MANU GOEL, 2 VINAY APARTMENT, JANKI KUTIR, JUHU CHURCH ROAD, JUHU, MUMBAI-400049 / VS. ASSISTANT COMMISSIONER OF INCOME TAX 21 (1), 6 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI-400051. ( / APPELLANT) .. ( / RESPONDENT) ./I.T.A. NO.5416/MUM/2013 ( / ASSESSMENT YEAR : 2010-11) ASSISTANT COMMISSIONER OF INCOME TAX 21 (1), 6 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI-400051. / VS. SMT.POOJA MANU GOEL, 2 VINAY APARTMENT, JANKI KUTIR, JUHU CHURCH ROAD, JUHU, MUMBAI-400049 ( / APPELLANT) .. ( / RESPONDENT) ./ ! ./PAN/GIR NO. :AEKPG9717Q ' / ASSESSEE BY SHRI R C JAIN # ' /REVENUE BY SHRI PITAMBAR DAS $ % # &' / DATE OF HEARING : 5.8.2014 () # &' /DATE OF PRONOUNCEMENT : 17. 9.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 28-05-2013 PASSED BY LD CIT(A)-32, MUMBAI AND THEY RELATE TO T HE ASSESSMENT YEAR 2010- 11. I.T.A. NO.5007 AND 5416/MUM/2013 2 2. THE ISSUE URGED BY THE ASSESSEE RELATES TO THE A SSESSMENT OF SHORT TERM CAPITAL GAIN ARISING ON SALE OF SHARES AS BUSINESS INCOME. THE ISSUE URGED BY THE REVENUE RELATES TO THE ASSESSMENT OF LONG TERM CAPITAL GAINS AS BUSINESS INCOME, I.E., WHETHER THE LD CIT(A) WAS JUSTIFIED IN HOLDING THAT THE LONG TERM CAPITAL GAIN IS NOT ASSESSABLE AS BUSINESS INCOME. 3. THE FACTS RELATING TO THE ABOVE SAID ISSUES ARE STATED IN BRIEF. THE ASSESSEE FILED HER RETURN OF INCOME DECLARING LONG TERM CAPITAL GAIN OF RS.2,52,69,254/- AND SHORT TERM CAPITAL GAIN OF RS. 47,82,664/-, BOTH ARISING ON SALE OF SHARES. THE ASSESSEE CLAIMED THE LONG TERM CAPITAL GAIN AS EXEMPT U/S 10(38) OF THE ACT AND PAID THE TAX ON SHORT TERM CA PITAL GAIN AT CONCESSIONAL RATE. THE AO, HOWEVER, HELD THAT THE ASSESSEE HAS BEEN INDULGING IN ADVENTURE IN THE NATURE OF TRADE AND ACCORDINGLY ASSESSED BOT H LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN AS BUSINESS INCOME OF THE ASSESSEE. IN THE APPEAL FILED BY THE ASSESSEE, THE LD CIT(A) CONFIRMED THE ORDER OF THE AO IN RESPECT OF SHORT TERM CAPITAL GAIN. IN RESPECT OF LONG TERM CAPITAL GAIN, THE LD CIT(A) HELD THAT THE SAME CANNOT BE ASSESSED AS BUSINESS INCOME AN D ACCORDINGLY DIRECTED THE AO TO ASSESS THE GAIN AS LONG TERM CAPITAL GAIN O NLY. AGGRIEVED, BOTH THE PARTIES HAVE FILED THESE APPEALS BEFORE US. 4. BEFORE US, THE LD D.R PLACED STRONG RELIANCE O N PARAGRAPH 6 AND PARAGRAPH 8 OF THE ASSESSMENT ORDER, WHEREIN THE AS SESSING OFFICER HAS ANALYSED THE SHARE TRANSACTIONS CARRIED ON BY THE ASSESSEE D URING THE YEAR UNDER CONSIDERATION. IN PARAGRAPH 6, THE AO HAS STATED T HAT THE ASSESSEE HAS DEALT IN 61 TYPES OF SCRIPTS WITH A SALES TURNOVER OF RS.14. 45 CRORES. THE NUMBER OF TRANSACTIONS WAS AROUND 300. ACCORDINGLY THE AO HA D EXPRESSED THE VIEW THAT THE ASSESSEE CANNOT BE CONSIDERED AS HAVING ACTED A S AN INVESTOR, SINCE AN INVESTOR WOULD NOT INDULGE IN SUCH KIND OF FREQUENT TRANSACTIONS HAVING HIGH VOLUME. THE AO FURTHER NOTICED THAT THE ASSESSEE HA D MADE A PROFIT OF RS.76,99,116/- AS SHORT TERM CAPITAL GAIN AND SUFFE RED A SHORT TERM LOSS OF RS.28,81,078/- AND THUS DECLARED NET SHORT TERM CAP ITAL GAIN OF RS.48,18,040/-. THE AO CARRIED OUT AN ANALYSIS OF THE GAIN OF RS.76 ,99,116/- REFERRED ABOVE AND NOTICED 63.5% OF THE PROFIT WAS EARNED BY HOLDING T HE SCRIPS FOR LESS THAN 30 I.T.A. NO.5007 AND 5416/MUM/2013 3 DAYS, 79% OF PROFIT WAS EARNED BY HOLDING THEM FOR 60 DAYS AND 83% OF THE PROFIT WAS EARNED BY HOLDING THEM FOR 90 DAYS ETC. IN THE CASE OF LONG TERM CAPITAL GAIN, THE AO OBSERVED AS UNDER:- IF THE GAINS CLAIMED UNDER LONG TERM CAPITAL GAIN IS SEEN THEN 100% OF THE GAIN IS EARNED WITHIN FIRST YEAR OF THE INVESTM ENT. (SIC) ACCORDINGLY, THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE NEVER HAD INTENTION TO HOLD THE SHARES FOR LONGER PERIOD AS I NVESTMENT BUT TO TRADE THEM WITH A MOTIVE TO EARN PROFIT. THE AO PLACED RELIAN CE ON THE CIRCULAR NO.4/2007 DATED 15.6.2007 ISSUED BY THE CBDT AND ALSO THE FOL LOWING CASE LAW TO SUPPORT HIS VIEWS:- A) SARANATH INFRASTRUCTURE (P) LTD VS. ACIT (120 TTJ (LUCK) 216). B) DECISION OF AAR REPORTED IN 288 ITR 641 C) DCIT VS. DEEPABEN A SHAH (99 ITD 219) 5. THE LD D.R FURTHER SUBMITTED THAT THE LD CIT (A) ALSO CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER IN RESPECT OF SHORT TERM CAPITAL GAIN BY PLACING RELIANCE ON THE PRINCIPLES DISCUSSED IN THE FOLLOWI NG CASE LAW:- A) RAJA BAHADUR WISHESHWARA SINGH 41 ITR 685(SC) B) V. NAGESH (ITA NO.5410/MUM/2008) C) G.VENKATASAMI NAIDU & CO. (35 ITR 584)(SC) D) PM MOHD MIRZA KHAN (73 ITR 735)(SC) E) SURESH R SHAH (258 CTR (BOM) 356) F) SUGANDH P SHAH 37 DTR 345)(AND)(TRIB) THE LD D.R FURTHER PLACED RELIANCE ON THE DECISION RENDERED BY MUMBAI D BENCH OF TRIBUNAL IN THE CASE OF DEVJI NENSHI PALANI VS. ITO (2012)(28 TAXMANN.COM 209); MUMBAI I BENCH DECISION RENDERED IN THE CASE OF SMT. SADHANA NABERA (ITA NO.2586/MUM/2009); AND ALSO THE DECISIONS REND ERED BY THE CO-ORDINATE BENCHES IN THE CASE OF HARSHAD MEHTA (6 TAXMAN 75) AND RAKESH SANGHVI (7 TAXMANN.COM 40). 6. THE LD D.R FURTHER SUBMITTED THAT THE LD CIT(A ), AFTER HAVING HELD THAT THE ASSESSEE WAS CARRYING ON PURCHASE AND SALE OF T RANSACTIONS WITH BUSINESS/PROFIT MOTIVE, SHOULD NOT HAVE HELD THAT T HE LONG TERM CAPITAL GAINS IS NOT ASSESSABLE AS BUSINESS INCOME. THE LD D.R SUBM ITTED THAT THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN ON FOUR SCRIPS ONLY. HOWEVER, THE ASSESSEE HAS I.T.A. NO.5007 AND 5416/MUM/2013 4 ALSO PURCHASED AND SOLD IN THREE SCRIPS ON SHORT TE RM BASIS, OUT OF THE FOUR SCRIPS SHOWN UNDER LONG TERM CAPITAL GAIN. THE LD D.R SUB MITTED THAT THE MERE HOLDING OF THE ABOVE SCRIPS FOR MORE THAN ONE YEAR WILL NOT CHANGE THEIR CHARACTER AS BUSINESS ASSET. THE LD D.R FURTHER SU BMITTED THAT THE ASSESSEE HERSELF HAS DECLARED SPECULATION PROFIT AS BUSINESS INCOME. ACCORDINGLY HE SUBMITTED THAT THE ASSESSING OFFICER WAS JUSTIFIED IN ASSESSING BOTH SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN AS BUSINESS INCOME IN THE HANDS OF THE ASSESSEE. 7. ON THE CONTRARY, THE LD A.R SUBMITTED THAT THE ASSESSEE IS NOT PRECLUDED FROM HOLDING TWO PORTFOLIOS VIZ., ONE FOR INVESTME NTS AND OTHER FOR STOCK IN TRADE. HE FURTHER SUBMITTED THAT THE ASSESSEE IS A HOUSE WIFE AND HER INTENTION WAS TO HOLD THE SHARES AS INVESTMENT ONLY. HE FURT HER SUBMITTED THAT THE ASSESSEE DID NOT BORROW ANY FUNDS FOR HER INVESTMEN T PURPOSE, BUT UTILIZED HER OWN FUNDS ONLY FOR MAKING INVESTMENT. HE FURTHER S UBMITTED THAT THE ASSESSMENT OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSING O FFICER HAS ACCEPTED THE GAIN DECLARED BY THE ASSESSEE AS CAPITAL GAINS IN THOSE YEARS. HE SUBMITTED THAT THE ASSESSMENT OF THE AY 2009-10 WAS COMPLETED U/S 143( 1) OF THE ACT. ACCORDINGLY HE SUBMITTED THAT THE ASSESSING OFFICER HAS TREATED THE ASSESSEE AS INVESTOR IN THE PAST THREE YEARS. HE SUBMITTED THAT THE ASSESS EE HAS INDULGED IN REPETITIVE TRANSACTIONS ONLY IN TWO SCRIPS (ITEM 3 & 9) OUT OF 61 SCRIPS DEALT IN THIS YEAR. INVITING OUR ATTENTION TO THE HOLDING ANALYSIS PLAC ED IN PAGE 43 OF THE PAPER BOOK, THE LD A.R SUBMITTED THE ASSESSEE HAS INDULGE D IN 184 TRANSACTIONS UNDER SHORT TERM CAPITAL GAIN, OUT OF WHICH ONLY 47 SCRIP S WERE HELD FOR LESS THAN 10 DAYS, 60 SCRIPS WERE HELD FROM 11 TO 30 DAYS AND TH E REMAINING SCRIPS WERE HELD FOR MORE THAN 30 DAYS. HE FURTHER SUBMITTED THE GO VERNMENT OF INDIA HAS INTRODUCED SECURITIES TRANSACTION TAX ON SHARE TR ANSACTIONS ONLY TO COVER UP THE LOSS ARISING ON EXEMPTING LONG TERM CAPITAL GAI NS AND ALSO FROM TAXING SHORT TERM CAPITAL GAINS AT CONCESSIONAL RATE. HE SUBMIT TED THAT THE DEPARTMENT HAS STARTED TAKING DIFFERENT VIEW, I.E., TO ASSESS THE GAINS AS BUSINESS INCOME, ONLY AFTER RATIONALIZATION OF THE TAXATION OF CAPITAL GA INS. HE SUBMITTED THAT THE INTENTION OF THE ASSESSEE AT THE TIME PURCHASE OF S HARES IS THE MAIN DETERMINING I.T.A. NO.5007 AND 5416/MUM/2013 5 FACTOR IN THIS KIND OF CASES. THE LD A.R SUBMITTED THAT THE ASSESSEE WAS HAVING INTENTION TO ACT AS INVESTOR ONLY FROM THE VERY BEG INNING. THE LD A.R PLACED RELIANCE ON THE FOLLOWING CASE LAW:- A) DCIT VS. E-CAP PARTNERS (2014)(45 TAXMANN.COM 342)(MUMB TRIB) B) LATE LALCHAND SIRALDAS ROHRA VS. DCIT (ITA NO .422/M/2011) C) M/S KARODIA CONSTRUCTION P LTD VS. DCIT (ITA NO.1074/MUM/2011) THE LD A.R ALSO RELIED UPON VARIOUS OTHER CASE LAW DISCUSSED BY HIM IN THE COMPILATION OF CIRCULAR & DECISIONS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE IS A HOUSE W IFE AND SHE HAS CARRIED OUT THE PURCHASE AND SALE OF TRANSACTIONS IN THE PAST Y EARS ALSO. IN ASSESSMENT YEARS 2007-08 AND 2008-09, THE ASSESSMENTS WERE COM PLETED BY ACCEPTING THE ACTIVITY OF THE ASSESSEE AS INVESTMENT ACTIVITY. I N THESE TWO YEARS, THE ASSESSEE HAS INCURRED LONG TERM CAPITAL LOSS AND ONLY IN THI S YEAR, THE ASSESSEE HAS INCURRED NET SHORT TERM CAPITAL GAIN OF RS.47.82 LA KHS AND LONG TERM CAPITAL GAIN OF RS.252.69 LAKHS. IT APPEARS THAT THE ASSES SING OFFICER CHOSE TO ASSESS THEM AS BUSINESS INCOME DURING THE YEAR UNDER CONSI DERATION, APPARENTLY FOR THE REASON THAT THE ASSESSEE HAS MADE HUGE PROFIT DURIN G THE YEAR UNDER CONSIDERATION. THE AO HAS ALSO CONSIDERED OTHER FA CTORS, SUCH AS SHARE TRANSACTIONS WERE HAVING HIGH FREQUENCY AND VOLUME; THE ASSESSEE HAS HELD THEM FOR SHORT PERIODS FROM 1 DAY TO 299 DAYS, REPE TITIVE TRANSACTIONS IN SAME SCRIPS, THE ASSESSEE HAS EARNED SPECULATIVE PROFITS AND THE DIVIDEND EARNED IS MEAGER VIS--VIS THE GAIN ARISING ON SALE OF SHARES . 9. BOTH THE PARTIES HAVE RELIED UPON VARIOUS CASE LAW TO SUPPORT THEIR RESPECTIVE CONTENTIONS. THE AO HAS ALSO PLACED REL IANCE ON THE CIRCULAR NO.4 OF 2007 DATED 15.6.2007 , WHEREIN CERTAIN GUIDING FACT ORS THAT ARE NEED TO BE CONSIDERED TO DECIDE ABOUT THE NATURE OF TRANSACTIO NS HAS BEEN STATED. ALL THE CASE LAWS REVEAL ONLY ONE POINT THAT THERE IS NO ST RAIGHT JACKET FORMULA TO DECIDE ABOUT THE NATURE OF SHARE TRANSACTIONS VIZ., WHETHE R IT WAS CARRIED AS BUSINESS ACTIVITY OR INVESTMENT ACTIVITY. THE FACTS PREVAIL ING IN EACH CASE HAS TO BE JUDGED INDEPENDENTLY IN ORDER TO RESOLVE THE SAID QUESTION . I.T.A. NO.5007 AND 5416/MUM/2013 6 10. A PERUSAL OF THE FINANCIAL STATEMENTS PERTAIN ING TO THE ASSESSEE WOULD SHOW THAT THE ASSESSEE HAS USED HER OWN FUNDS ONLY FOR MAKING INVESTMENTS. IN PAGE 53 OF THE PAPER BOOK, THE ASSESSEE HAS PLACED A FUND FLOW STATEMENT FOR THE YEAR UNDER CONSIDERATION AND FOR THE THREE YEAR S IMMEDIATELY PRECEDING THERETO. IT CAN BE NOTICED THEREFROM THE ASSESSEE HAS USED HER CAPITAL, RENT DEPOSIT RECEIVED BY HER, ADVANCE AGAINST SALE OF FL AT RECEIVED BY HER FOR MAKING INVESTMENTS. THE ASSESSEE HAS NOT INVESTED HER FUN DS ONLY IN SHARE TRADING ACTIVITY. SHE HAS INVESTED IN PROPERTY, SHARES, JE WELLERY, PPF AND ALSO FOR GIVING LOANS TO OTHERS. THE ASSESSEE HAS ALSO PARKED HER FUNDS IN BANKS. ONLY DURING THE YEAR UNDER CONSIDERATION, THE INVESTMENT IN SHA RES ACCOUNTED FOR ABOUT 50% OF THE TOTAL FUNDS AVAILABLE WITH HER. HOWEVER, IN THE EARLIER YEARS, THE RATIO OF INVESTMENT TO TOTAL FUNDS WAS MUCH LESS, MORE PARTI CULARLY IN AY 2007-08, IT WAS ONLY 10%. THESE FACTS WOULD SHOW THAT THE ASSESSEE HAS SPREAD HER INVESTMENTS IN A VARIETY OF ASSETS INCLUDING THE SH ARES. 11. THE INCOME FROM SHARE TRADING ACTIVITY DECLA RED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS AS GIVEN BELOW:- SHORT TERM CAPITAL GAINS 47,82,664 LONG TERM CAPITAL GAINS 2,52,69,254 3,00 ,51,918 ========== A CAREFUL ANALYSIS OF THE PROFIT EARNED BY THE ASSE SSEE WOULD SHOW THAT THE ASSESSEE HAS GENERATED 80% OF THE PROFIT FROM LONG TERM CAPITAL GAINS AND ONLY LESS THAN 20% OF PROFIT IS EARNED FROM SHORT TERM T RADING ACTIVITY. 12. THE ASSESSEE HAS DEALT IN 61 TYPES OF SHARE S, OUT OF WHICH THE REPETITIVE TRANSACTIONS, PURCHASE-SALES-PURCHASE, ARE SEEN ONL Y IN TWO SCRIPS VIZ., IN ALTALNTA SHARES (SL. NO.3) AND BILLPOWER (SL.NO.9). IN THE BALANCE 59 SHARES, THE ASSESSEE HAS ONLY PURCHASED THE SHARES IN ONE OR MO RE TRENCH AND SOLD THEM SUBSEQUENTLY IN ONE OR MORE TRENCH. HENCE, IN OUR VIEW, THE ASSESSEE CANNOT BE HELD TO HAVE INDULGED IN REPETITIVE TRANSACTIONS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THOUGH THE AO HAS POINTED OUT THAT THE T OTAL NUMBER OF TRANSACTIONS ENTERED DURING THE YEAR UNDER CONSIDERATION WERE AB OUT 300, A PERUSAL OF RELEVANT STATEMENT PLACED FROM PAGE 33 WOULD SHOW T HAT THEY WERE NOT I.T.A. NO.5007 AND 5416/MUM/2013 7 CONTINUOUS TRANSACTIONS IN RESPECT OF A PARTICULAR SHARE. WHAT THE ASSESSEE APPEARS TO HAVE DONE IS THAT SHE HAS PURCHASED SHAR ES OF A PARTICULAR SCRIP IN MORE THAN ONE OCCASION AND SOLD THEM MORE THAN ONE OCCASION. IN A FLUCTUATING MARKET, IT IS WITHIN THE SCOPE OF HUMAN PROBABILITY THAT AN INVESTOR ALSO WOULD FOLLOW SIMILAR KIND OF STRATEGY OF PURCHASING AND S ELLING SCIPS IN INSTALLMENTS. 13. THE AO HAS ALSO POINTED OUT THAT THE HOLDIN G PERIOD WAS LESS THAN ONE MONTH IN 106 TRANSACTIONS. THERE CANNOT BE ANY DIS PUTE THAT THE DECISION TO HOLD THE SHARES FOR A LONGER PERIOD MAY BE REVERSED BY AN INVESTOR IN A HIGHLY FLUCTUATING MARKET. WE HAVE ALREADY NOTICED THAT T HE SHORT TERM CAPITAL GAINS ACCOUNT FOR ABOUT 20% OF THE TOTAL GAINS MADE BY TH E ASSESSEE DURING THE YEAR. HENCE, IN OUR VIEW, THE SHORT HOLDING PERIOD IN RES PECT OF CERTAIN SCRIPTS, IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, CANNOT BE TAKEN AS THE DETERMINATIVE FACTOR HERE. 14. THE AO HAS FURTHER POINTED OUT THAT THE RAT IO OF TURNOVER TO THE VALUE OF SHARE HOLDINGS WORK OUT TO 4.61 TIMES. THERE IS A FALLACY IN THIS COMPUTATION. WHAT IS REQUIRED TO BE SEEN IS THE NUMBER OF TIMES, THE FUNDS OF THE ASSESSEE HAS BEEN ROTATED. THE HIGHER THE ROTATION OF FUNDS , THE MORE THE PRESUMPTION THAT THE ASSESSEE HAS ACTED AS A BUSINESS MAN. IN THE INSTANT CASE, THE AO HAS CONSIDERED THE VALUE OF SHARES HELD AS AT THE YEAR END TO COMPARE THE SAME WITH THE TURNOVER. THE AO SHOULD HAVE CONSIDERED THE FU NDS AVAILABLE WITH THE ASSESSEE FOR THE PURPOSE. THE FUNDS AVAILABLE WITH THE ASSESSEE AS AT 31.3.2010, AS PER THE FUND FLOW STATEMENT PLACED AT PAGE 53 OF THE PAPER BOOK IS 6.21 CRORES. WHEN IT IS COMPARED WITH THE TURNO VER OF RS.14.45 CRORES, IT WORKS OUT SLIGHTLY MORE THAN 2 TIMES. IF THE SAME IS COMPARED WITH THE TURNOVER OF SHORT TERM SCRIPS, VIZ., RS.11.23 CRORES, IT WOR KS OUT LESS THAN 2 TIMES OF THE FUNDS. HENCE, THE VIEW ENTERTAINED BY THE AO ON TH IS COUNT ALSO FAILS. 15. OTHER COMMENTS OF THE AO RELATING TO SPECULA TION INCOME AND LOWER DIVIDEND ARE, IN OUR VIEW, CANNOT BE CONSIDERED AS DETERMINATIVE FACTORS. THERE ARE NUMBER OF JUDICIAL DECISIONS INCLUDING THAT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GOPAL PUROHIT (228 CTR 582), WHEREIN IT IS HELD THAT AN ASSESSEE IS ENTITLED TO MAINTAIN TWO SEPARATE PORTFOLIOS, ONE F OR INVESTMENT AND OTHER FOR I.T.A. NO.5007 AND 5416/MUM/2013 8 STOCK IN TRADE. IN THE INSTANT CASE, THE ASSESSEE HAS CLEARLY DEMARCATED BOTH TYPES, VIZ., THE SPECULATIVE TRANSACTIONS HAVE BEEN SHOWN AS BUSINESS ASSETS AND OTHER SHARES HAVE BEEN SHOWN AS INVESTMENTS. 16. WE HAVE ALREADY NOTICED THAT THE TAX AUTHOR ITIES HAVE CONSIDERED THE VARIOUS PRINCIPLES LAID DOWN BY THE CBDT AND IN JUD ICIAL DECISIONS IN THE INSTANT CASE, BUT WE HAVE SEEN IN THE EARLIER PARAGRAPHS TH AT THEY ARE NOT APPLICABLE TO THE INSTANT CASE IF THEY ARE CONSIDERED IN THE PREV AILING FACTS AND CIRCUMSTANCES. HENCE, UNDER THESE SET OF FACTS DISCUSSED ABOVE, TH E ASSESSEE SHOULD BE CONSIDERED AS AN INVESTOR ONLY DURING THE YEAR UNDE R CONSIDERATION. IN THAT CASE, THE PROFITS ARISING ON SALE OF SHARES SHOULD BE ASSESSED UNDER THE HEAD CAPITAL GAINS ONLY. THE ORDER OF LD CIT(A) IN RE SPECT OF SHORT TERM CAPITAL GAINS STANDS REVERSED AND THE ORDER PASSED IN RESPE CT OF LONG TERM CAPITAL GAINS STANDS CONFIRMED. ACCORDINGLY, THE ASSESSING OFFI CER IS DIRECTED TO COMPUTE THE PROFITS ARISING ON SALE OF SHARES UNDER THE HEAD CA PITAL GAINS ONLY. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17TH SEPT , 2014. () $ * +, 17TH SEPT, 2014 ) # -% . SD SD ( / VIVEK VARMA) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER $ % MUMBAI: 17TH SEPT,2014. . . ./ SRL , SR. PS I.T.A. NO.5007 AND 5416/MUM/2013 9 !'#$ %$&' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ /& ( ) / THE CIT(A)- CONCERNED 4. $ /& / CIT CONCERNED 5. 0- &1 , ' 1 , $ % / DR, ITAT, MUMBAI CONCERNED 6. -2 3% / GUARD FILE. 4 $ / BY ORDER, TRUE COPY 5 (ASSTT. REGISTRAR) ' 1 , $ % /ITAT, MUMBAI