VINAYA S SHENOI, MUMBAI V. ASST CIT CIR 19(2), MUMBAI

ITA 757/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87813 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 10-03-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 03-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JITENDRA KUMAR
• Assessee Lawyers: NITESH JOSHI
• Keywords: Business income
• Section: 2

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI , !' ## , !' $ BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO.757/M/2012 ( ' ( ' ( ' ( ' ( / ASSESSMENT YEAR: 2004-05) MRS. VINAYA S. SHENOI, PLOT NO.74/75, SEA BREEZE, 5 TH FLOOR, RAMKRISHNA MISSION ROAD, SANTACRUZ (WEST), MUMBAI 400 054. PAN: AJUPS0284P ' ' ' ' / VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE 19(2), PIRAMAL CHAMBERS,LALBAUG, MUMBAI 400 012 ( )* / APPELLANT) ( +,)* / RESPONDENT) ASSESSEE BY : SHRI NITESH JOSHI, A.R. REVENUE BY : SHRI JITENDRA KUMAR, D.R. ' - ./ / DATE OF HEARING : 01.01.2015 01( - ./ / DATE OF PRONOUNCEMENT : 09.01.2015 !2 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 09.12.2011 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS CIT(A)] RELEVANT TO ASSESSMENT YEAR 2004-05. 2. THE SOLE ISSUE RAISED BY THE ASSESSEE THROUGH HE R GROUNDS OF APPEAL IS REGARDING THE TAXABILITY OF INCOME OF RS.27,68,221/ - EARNED FROM PURCHASE AND ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 2 SALE OF SHARES AS BUSINESS INCOME AS AGAINST THE CL AIM OF THE ASSESSEE AS SHORT TERM CAPITAL GAINS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IN HER RETURN OF INCOME HAD SHOWN THE INCOME FROM LONG TERM CAPITAL GAINS, SHORT TERM CAPITAL GAINS, DIVIDEND AND INTEREST INCOME. THE ASSESSING OFFICE R (HEREINAFTER REFERRED TO AS THE AO) NOTICED THAT THE ASSESSEE HAD DECLARED SHOR T TERM CAPITAL GAINS OF RS.27,35,187/- FROM PURCHASE AND SALE OF SHARES IN MORE THAN 300 TRANSACTIONS DURING THE YEAR. CONSIDERING THE VOLUME OF TRANSAC TIONS DONE BY THE ASSESSEE AND SHORT DURATION FOR WHICH EACH SHARE WAS HELD, T HE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE INCOME FROM TH E PURCHASE AND SALE OF SHARES BE NOT TREATED AS BUSINESS INCOME. THE ASSE SSEE VIDE LETTER DATED 27.06.06 REPLIED AS UNDER: REASONS TO SHOW AS TO WHY THE PURCHASE AND SALE OF SHARES/SECURITIES SHOULD NOT BE TREATED AS BUSINESS ACTIVITY: A) THE ASSESSEE HAD BEEN REGULARLY AN INVESTOR OF S HARES SINCE 1970 FROM WHICH TIME SHE HAS BEEN REGULARLY FILING THE RETURNS OF INCOME. B) OVER THE YEARS THE ASSESSEE HAD BUILT UP A PORT FOLIO OF SHARES AND SECURITIES BY INVESTING SURPLUS FUNDS FROM THE INCOME EARNED BY HER FROM TUTION FEES AND SAVINGS OF HER. THESE INVESTMENTS WERE MADE WITH THE PRIMARY INTENTION OF GAINING LONG TERM APPRECIATION AND REGULAR DIVIDENDS / INTE REST THEREFROM. C) AS MENTIONED ABOVE, THE ASSESSEE'S MAIN INTENTIO N OF MAKING INVESTMENTS IN SHARES WAS TO EARN LONG TERM APPRECI ATION AND/ OR EARNING DIVIDEND / INTEREST. HOWEVER, IF THE EXP ECTED APPRECIATION IN THE SHARES / SECURITIES WAS ACHIEVE D DURING A SHORT SPAN OF TIME, THEN THE ASSESSEE WOULD ENCASH THE SAID APPRECIATION. D) THE ASSESSEE HAS DOES NOT HAVE ANY OVERDRAFT FACILI TY. E) THE AVERAGE HOLDING OF THE ASSESSEE'S INVESTMENTS I N SHARES / SECURITIES IS AROUND 3-5 YEARS. HOWEVER, IF THE APP RECIATION ON THE SAID INVESTMENTS WAS FASTER THEN THE SAID PERIO D OF HOLDING THEN IN SOME CASES, THE ASSESSEE WOULD TAKE THE BEN EFITS OF ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 3 SUCH APPRECIATION AND SELL THESE SECURITIES. F) THE SHARES / SECURITIES PURCHASED ARE BEING SHOWN B Y THE ASSESSEE AS INVESTMENTS IN THE BALANCE SHEET FILED WITH THE INCOME TAX DEPARTMENT. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT PROFITS/ GAINS ON PURCHASE AND SALES OF SHARES / SECURITIES ARE TO BE TREATED AS CAPITAL GAINS AND NOT AS BUSINESS INCOME OF THE ASSESSEE. 4. THE AO ALSO OBSERVED THAT UP TO ASSESSMENT YEAR 2002-03, ASSESSEE HAD FILED THE RETURN OF INCOME SHOWING PURCHASE AND SALE OF SHARES AS SHARE TRADING BUSINESS. THE AO ASKED THE ASSESSEE TO EXP LAIN WHY THERE WAS CHANGE IN THE ACCOUNTING POLICY FROM TRADING IN SHA RES IN ASSESSMENT YEAR 2003-04 TO INCOME FROM INVESTMENT IN SHARES IN ASSE SSMENT YEAR 2004-05. THE ASSESSEE VIDE LETTER DATED 21.08.06 REPLIED AS UNDER: EXPLANATION REGARDING TRADING IN SHARES IN A.Y.200 3-04 AS COMPARED TO INCOME FROM INVESTMENT IN SHARES IN A.Y. 2004-05:- TILL A.Y. 2003-04, THE TRANSACTIONS WHICH WERE COMP ULSORILY CARRIED FORWARD, WERE DISCLOSED AS PURCHASE' AND 'SALE' OF SHARES. THESE SHARES WERE ACTUALLY ACQUIRED FOR INVESTMENT, BUT HAD TO B E CARRIED FORWARD DUE TO BOOK CLOSURE. APART FROM SUCH TRANSACTIONS, THERE A RE A FEW CASES WHERE THE SHARES WERE ACQUIRED FOR SQUARING UP ON THE SAME DA Y WHICH WERE ALSO DISCLOSED AS 'PURCHASE' AND 'SALE' OF SHARES. DURING A. Y 2004-05, THE ASSESSEE HAS NOT ENTERED I NTO ANY SUCH TRANSACTIONS AND HAS THEREFORE NOT DISCLOSED ANY 'P URCHASE' AND 'SALE' OF SHARES. 5. THE AO WAS NOT SATISFIED BY THE ABOVE REPLY OF T HE ASSESSEE. HE OBSERVED THAT THE ASSESSEE HAD SUBSTANTIAL SHARE DE ALINGS. THE FREQUENCY OF TRANSACTIONS, NUMBER OF SCRIPTS DEALT IN AND THE DU RATION FOR WHICH IT WERE HELD CLEARLY SHOWED THAT THE ACTIVITY OF PURCHASE A ND SALE OF SHARES WAS DONE WITH AN INTENTION OF TRADING. HE OBSERVED FROM THE HUGE VOLUME OF SHARE TRADING DONE BY THE ASSESSEE DURING THE FINANCIAL Y EAR 2003-04 ON A DAY TO DAY BASIS THAT THE INTENTION BEHIND THE TRANSACTION WAS OF BUSINESS. WHETHER ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 4 THE DELIVERY OF THE PARTICULAR SCRIPT WAS TAKEN PHY SICALLY OR NOT WAS NOT MATERIAL FACT. HOWEVER, FROM THE FACTS OF THE CASE , IT WAS EVIDENT THAT THE SHARE TRANSACTIONS WERE DONE WITH THE INTENTION OF BUSINESS. AGGRIEVED FROM THE ORDER OF THE AO, THE ASSESSEE FI LED THE APPEAL BEFORE THE LD. CIT(A). 6. BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT ASS ESSEE HAD USED HER OWN FUNDS FOR THE PURPOSE OF INVESTMENT IN SHARES. THE RE WAS SUFFICIENT DIVIDEND INCOME, INTEREST INCOME AND INCOME FROM MUTUAL FUND UNITS AS WELL AS FROM LONG TERM CAPITAL GAINS WHICH SHOWED THAT THE ASSES SEE WAS A PRUDENT INVESTOR WHO HAD MADE DIFFERENT INVESTMENTS HAVING DIFFERENT DEGREE OF RISK RIGHT FROM HIGHEST SECURITY, MODERATE RISK TO HIGH RISK. THE ASSESSEE HAD MADE INVESTMENTS IN VARIOUS KINDS OF ASSETS HAVING VARIO US DEGREES OF RISK AND RETURNS. IT WAS ALSO SUBMITTED THAT DIVIDEND INCOM E OF THE ASSESSEE WAS 12% OF TOTAL INCOME, INTEREST AND OTHER INCOME WAS 19%, LONG TERM CAPITAL GAINS WAS 25% AND SHORT TERM CAPITAL GAINS WAS 44%. IT W AS SUBMITTED THAT TAKING INTO CONSIDERATION THE INVESTMENT PATTERN OF THE AS SESSEE, THE ASSESSEE COULD NOT BE HELD TO BE A TRADER BUT INVESTOR ONLY. HOWE VER, THE LD. CIT(A) ALSO DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE A ND HELD THAT THE INCOME IN QUESTION WAS BUSINESS INCOME OF THE ASSESSEE. HE, AFTER DISCUSSION OF THE DETAILED FACTS AND VARIOUS JUDICIAL DECISIONS, CONC LUDED HIS FINDINGS AS UNDER: 5.6. KEEPING IN MIND, THE ABOVE BROAD PRINCIPLES A ND FACTS OF THE PRESENT CASE AND AFTER APPLYING THE RATIO OF ABOVE MENTIONE D JUDICIAL PRONOUNCEMENTS, IT IS FOUND THAT THE ASSESSEE DURIN G THE PREVIOUS YEAR HAD ENTERED INTO MORE THAN 300 TRANSACTIONS OF PURC HASE/SALE OF SHARES OF NUMEROUS COMPANIES. THE MAXIMUM HOLDING P ERIOD WAS VERY SHORT. THE CONDUCT OF THE ASSESSEE IN SHOWING INCOM E FROM DELIVERY BASED TRANSACTIONS ARE SOUGHT TO BE PROJECTED AS ST CG ONLY BECAUSE THERE WAS ACTUAL DELIVERY AND BECAUSE THEY WERE SHOWN AS INVESTMENTS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. I AM OF THE V IEW THAT THE ABOVE ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 5 TWO ASPECTS WILL NOT MAKE ANY DIFFERENCE TO THE NAT URE OF THE TRANSACTION WHERE DELIVERY IS EFFECTED CONSIDERING THE OTHER FACTS PREVAILING IN THE CASE OF THE ASSESSEE VIZ., (I) THE VOLUME AND FREQUENCY OF PURCHASE AND SALE OF TH E TRANSACTIONS WHICH WERE MORE THAN 600 IN NUMBER WHE RE THE HOLDING PERIOD WAS BETWEEN MINIMUM OF 1 DAY TO MAXI MUM OF 6 MONTHS. (II) SHARES OF NUMEROUS COMPANIES HAD BEEN BOUGHT AND SO LD BY THE ASSESSEE DURING THE PREVIOUS YEAR. (III) THE VOLUME OF PURCHASE AND SALE OF THE ASSESS EE DURING THE PREVIOUS YEAR WAS SUBSTANTIALLY HIGH. (IV) THE PURCHASE AND SALE OF SHARES WAS THE ONLY ACTIVI TY OF THE ASSESSEE. (V) THE PERIOD OF HOLDING BEING VERY SHORT IT IS R EASONABLE TO PRESUME THAT THE PURCHASE WAS MADE WITH AN INTENTIO N TO RESELL AND NOT TO INVEST FOR APPRECIATION OF CAPITAL AND E ARNING OF DIVIDEND. (VI) THE SCALE OF ACTIVITY IS SUBSTANTIAL. (VII) THE TRANSACTIONS WERE CONTINUOUS AND REGULAR BESIDE S BEING SYSTEMATIC. (VIII) SUBSTANTIAL TIME DEVOTED BY THE ASSESSEE TO THE ACT IVITY OF PURCHASE AND SALE. IN FACT, THE ONLY SOURCE OF INCOME IN THE PROFIT AND LOSS ACCOUNT IS FROM PURCHASE AND SALE OF SHARES. (IX) ALL THE SHARES SOLD AND PURCHASED ARE OF LISTED COM PANIES (X) COMPOSITION OF THE DIVIDEND INCOME IS MEAGRE, WHICH GOES TO SHOW THAT THE ASSESSEE NEVER LOCKED FOR RETURNS FROM INV ESTMENTS. (XI) FURTHER, THE HOLDING PERIOD OF THE SHARES TRANSACTE D WHICH SHOW THAT INTENTION WAS ONLY TO BOOK PROFIT AND NOT TO I NVESTMENT. ALL THESE FACTS PROVE BEYOND DOUBT THAT SHE WAS VER Y WELL ENGAGED IN THE ADVENTURE IN THE NATURE OF TRADE. TH E ASSESSING OFFICER HAS DISCUSSED IN DETAIL IN THE ASSESSMENT O RDER RELYING UPON VARIOUS JUDGEMENTS THAT MANNER, VOLUME AND PER IOD OF HOLDING OF MAXIMUM SHARES CLEARLY SHOW THAT THE APPELLANT I S ENGAGED IN TRADING AND NOT IN INVESTMENT. FURTHER, IF SOMETHIN G IS ACCEPTED IN ANY OF THE EARLIER YEARS U/S.143(1) THA T WILL NOT AMOUNT TO ACCEPTANCE BY THE DEPARTMENT REGARDING HO LDING OF STOCK IN TRADE OR INVESTMENT. THE ASSESSING OFFICER HAD NO OCCASION TO APPLY HIS MIND IN EARLIER YEARS AS NO S CRUTINY WAS DONE IN THE CASE. APPELLANT IS ENGAGED IN LARGE VOL UME OF TRANSACTIONS IN SHARES AND WHEN A. 0. SCRUTINUSED T HE CASE IN THE YEAR UNDER CONSIDERATION AND FOUND THAT SHE IS ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 6 SYSTEMATICALLY ENGAGED IN TRADING OF SHARES. (XII) APPELLANT CANNOT TREAT PROFIT AS SHORT TERM C APITAL GAIN WHEN SHARES ARE SOLD WITHIN YEAR AND HOLDING PERIOD IN MOST OF TRANSACTIONS IS ONLY ONE DAY AND IN SOME CASES A FEW MONTHS. (XIII) HON'BLE CBDT HAD ISSUED CIRCULAR NO.4/2007 D ATED 15.06.2007 AFTER CONSIDERING VARIOUS JUDGEMENTS ON THE IDENTICAL ISS UE AND CONCLUDED THREE ASPECTS TO DETERMINE WHETHER ANY TRANSACTION IS TRA DING OR INVESTMENT (A) MAGNITUDE OF PURCHASE AND SALE (B) PERIOD OF HOLDING (C) MOTIVE BEHIND IT BUT THE APPELLANT HAS FAILED TO COME CLEAN ON THESE CRITERIA TOO IN THE PRESENT CASE. (XIV) THE WORST CASE AGAINST THE APPELLANT IS, HIS OWN BEHAVIOR OF TREATMENT OF INCOME FROM SHARE TRADING AS BUSINESS INCOME TIL L ASSTT. YEAR. 2003-2004. IT CHANGED ITS TRACK OF TREATMENT OF SUC H INCOME FROM AY 2004-05 ONLY AFTER THE AMENDMENT IN RELEVANT PROVIS IONS OF ACT. 5.7. ON THE BASIS OF THIS FACTUAL FINDING AND ALSO ANALYSING THE CASE LAWS REGARDING ADVENTURE IN THE NATURE OF TRADE THE VIEW OF A.0. THAT THE ASSESSEE IS ENGAGED IN ADVENTURE IN NATURE OF TRADE ON FULL-SCALE AND IT HAS SHOWN PURCHASE OF SHARES AS INVESTMENTS AND GAINS AS SHORT-TERM CAPITAL GAIN WITH A VIEW TO AVOID TAX. INVESTMENT S HOWN IN THE BOOKS OF ACCOUNT IS NOTHING BUT STOCK IN TRADE, BECAUSE THE APPELLANT HAS NOT ACCOUNTED THESE TRANSACTIONS AS PER ACCOUNTING POLI CY. 5.8. PURCHASE OF SHARES DURING THE YEAR AND SELLING THEM FREQUENTLY IN SHORT PERIOD DO INDICATE THAT THE ASSESSEE HAS P URCHASED THE SHARES WITH A MOTIVE TO EARN PROFIT IN SHORT PERIOD . ALL THESE FACTS INDICATE THAT THE INTENTION OF THE ASSESSEE IS TO G AIN PROFITS BY DEALING IN SHORT TERM PERIOD ONLY. NOT ONLY THE ABOVE, IT IS F OUND THAT THERE IS A SMALL AMOUNT OF DIVIDEND, WHEN COMPARED TO THE GAIN IN SA LES AND ALSO THE FACT THAT THE ASSESSEE IS INVOLVED IN SHARE TRADING. IN THE LIGHT OF THE FACT AND CIRCUMSTANCES CONSIDERED ABOVE, I AM OF THE CONSIDE RED OPINION THAT THE CONCLUSION OF THE AO THAT THE INCOME FROM SALE OF S HARES, DECLARED BY THE ASSESSEE DURING THE YEAR AND SHORT-TERM GAIN, I S INCOME FROM BUSINESS ACTIVITY IS CORRECT AND CALLS FOR NO INTERFERENCE. 6. AS REGARDS LD. A.R.'S RELIANCE ON THE JUDGEMENT OF GOPAL PUROHIT AND JANAK S. RANGWALA, IT MAY BE STATED THAT THEY WERE ON THE CONSISTENCY OF TREATMENT OF SHARE DEALING IN THEIR CASE. BUT IN TH E PRESENT CASE AS EVIDENT FROM THE ASSESSMENT ORDER, IT IS THE APPELLANT WHIC H HAS RESORTED TO ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 7 INCONSISTENT TREATMENT OF SHARE DEALING AND ITS TRE ATMENT IN BOOKS OF ACCOUNT AND PROFIT AND LOSS ACCOUNT AS WELL AS COMP UTATION OF INCOME. JUST TO REFRESH, THE APPELLANT ITSELF HAS BEEN SHOW ING SHARE DEALING INCOME AS BUSINESS INCOME FROM SHARE DEALING TILL A .Y.2003-2004. 6.1 AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE A SSESSEE HAS COME IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. R EPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO GONE THROUGH THE RECORD. THE LD. COUNEL FOR THE ASSESSEE HAS REITERATED HIS SUBMISSIONS AS WERE MAD E BEFORE THE LD. CIT(A). HE HAS INVITED OUR ATTENTION TO PAGE 8 OF THE ORDER OF THE LD. CIT(A) WHEREIN THE LD. CIT(A) HAS REPRODUCED THE SUBMISSIONS OF TH E ASSESSEE, WHEREIN IT WAS SUBMITTED THAT APART FROM INVESTMENT IN EQUITY SHARES, THE ASSESSEE HAD MADE SUBSTANTIAL INVESTMENTS IN MUTUAL FUND UNITS, RBI BONDS, DEBENTURES AND FDRS WITH THE COMPANY. HE HAS FURTHER SUBMITTE D THAT THE ASSESSEE HAD USED HER OWN FUNDS FOR THE PURPOSE OF INVESTMENT. FURTHER HE HAS DRAWN OUR ATTENTION TO THE TABLE DRAWN AT PAGE 9 OF THE IMPUG NED ORDER WHEREIN IT HAS BEEN SHOWN THAT OUT OF THE TOTAL INCOME OF THE ASSE SSEE ABOUT 31% WERE RECEIPTS FROM DIVIDEND AND INTEREST INCOME, ABOUT 2 5% WERE LONG TERM CAPITAL GAINS AND THE REST 44% WERE DECLARED AS SHORT TERM CAPITAL GAINS. HE THEREFORE HAS SUBMITTED THAT THE ASSESSEE IN THE LI GHT OF HIS SUBMISSIONS BE TREATED AS AN INVESTOR AND THE INCOME FROM PURCHASE AND SALE OF SHARES BE TREATED AS SHORT TERM CAPITAL GAINS. ON THE OTHER HAND, THE LD. D.R. HAS RELIED UPON TH E FINDINGS OF THE LOWER AUTHORITIES. 8. THE ASSESSEE IN HER PAPER BOOK HAS SUBMITTED THE PARTICULARS OF SHORT TERM CAPITAL GAINS IN THE SHAPE OF A CHART. A PERU SAL OF THE SAID CHART REVEALS ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 8 THAT THE ASSESSEE HAD MADE REPETITIVE TRANSACTIONS OF SALE AND PURCHASE IN RESPECT OF SHARES OF SOME COMPANIES. WHEN THE LD. A.R. FOR THE ASSESSEE WAS ASKED TO EXPLAIN IN THIS RESPECT, HE HAS SUBMITTED THAT MERELY BECAUSE THE ASSESSEE HAD MADE CERTAIN REPETITIVE TRANSACTIONS T HAT TOO AFTER A REASONABLE GAP OF TIME PERIOD THAT ITSELF CANNOT BE SAID THAT THE ASSESSEE WAS DOING BUSINESS ACTIVITY. 8.1 AFTER HEARING THE LD. REPRESENTATIVES OF THE PA RTIES AT LENGTH AND AFTER GOING THROUGH THE RECORD, WE FIND THAT THOUGH THE A SSESSEE HAD ADOPTED DIFFERENT PATTERNS OF INVESTMENT BUT THAT ITSELF CA NNOT BE A REASON OR GROUND TO TREAT THE ASSESSEE AS AN INVESTOR, SO FAR SO, THE I NCOME FROM PURCHASE AND SALE OF SHARES IS CONCERNED. IT HAS BEEN SUBMITTED BY T HE ASSESSEE IN HER WRITTEN SUBMISSIONS BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAD INVESTED HER MONEY HAVING DIFFERENT DEGREE OF RISK RIGHT FROM HIGHEST SECURITY, MODERATE RISK TO HIGH RISK. HENCE, THE INVESTMENT PATTERN OF THE AS SESSEE SHOWS THAT THOUGH THE ASSESSEE HAD INVESTED MONEY IN TRANSACTIONS HAV ING HIGHEST SECURITY LIKE RBI BONDS AND INCOME FROM MUTUAL FUNDS. HOWEVER, S HE HAS ALSO DONE RISK ORIENTED TRANSACTIONS IN PURCHASE AND SALE OF SHARE S. THE INVESTMENT PATTERN OF THE ASSESSEE SHOWS THAT THE ASSESSEE ON THE ONE HAND HAD DONE THE ADVENTURE OF TRADING IN SHARES, HOWEVER, ON THE OTH ER HAND, TO MINIMIZE HER RISKS, SHE HAD MADE INVESTMENTS IN LOW RISK SECURIT IES. MERELY BECAUSE THE ASSESSEE HAD MADE SOME OF HER INVESTMENTS IN HIGH S ECURITY INVESTMENTS THAT DOES NOT CHANGE THE CHARACTER OF THE TRANSACTIONS D ONE BY THE ASSESSEE WHICH WERE IN THE NATURE OF ADVENTURE OF TRADING IN PURCH ASE AND SALE OF SHARES. THE LD. CIT(A) HAS CATEGORICALLY NOTED THAT THE VOLUME AND FREQUENCY OF PURCHASE AND SALE TRANSACTIONS WAS MORE THAN 600 IN NUMBER. THE TRANSACTIONS WERE CONTINUOUS AND REGULAR BESIDES BE ING SYSTEMATIC, WHICH ITA NO.757/M/2012 MRS. VINAYA S. SHENOI 9 SHOWED THAT THE ASSESSEE HAD DEVOTED SUBSTANTIAL TI ME IN THE ACTIVITY OF PURCHASE AND SALE OF SHARES. THE NATURE OF TRANSAC TIONS AND THE HOLDING PERIOD OF THE SHARES TRANSACTED SHOWED THAT THE INT ENTION WAS ONLY TO BOOK PROFIT AND NOT OF INVESTMENT AND FURTHER THE REPETI TIVE TRANSACTIONS MADE BY THE ASSESSEE SHOWED THAT THE ASSESSEE HAD ACTED AS A TRADER IN THE PURCHASE AND SALE OF SHARES AND NOT INVESTOR. 9. IN VIEW OF ABOVE, WE DO NOT FIND ANY INFIRMITY I N THE ORDER OF THE LD. CIT(A) IN TREATING THE INCOME FROM PURCHASE AND SAL E OF SHARES AS BUSINESS INCOME AS AGAINST THE CLAIM OF THE ASSESSEE AS SHOR T TERM CAPITAL GAINS. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HE REBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/01/2015. !2 - 01( 3 4!'5 09/01/2015 1 - # SD/- SD/- ( / RAJENDRA) ( ## / SANJAY GARG) !' / ACCOUNTANT MEMBER !' / JUDICIAL MEMBER /MUMBAI ; 4!' / DATED 09.01. 2015 * KISHORE !2 - +.; <;(. !2 - +.; <;(. !2 - +.; <;(. !2 - +.; <;(./ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. = ( ) / THE CIT(A)- 4. = / CIT 5. ;@# +.' , , / THE DR CONCERNED BEN CH , 6. #A / GUARD FILE. !2' !2' !2' !2' / BY ORDER, ,;. +. //TRUE COPY// B BB B/ // /C C C C ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI