Shruta K.Patel, Surat v. The ACIT.,Circle-3,, Surat

ITA 1494/AHD/2009 | 2006-2007
Pronouncement Date: 18-11-2011 | Result: Dismissed

Appeal Details

RSA Number 149420514 RSA 2009
Assessee PAN AHZPP3866H
Bench Ahmedabad
Appeal Number ITA 1494/AHD/2009
Duration Of Justice 2 year(s) 6 month(s) 7 day(s)
Appellant Shruta K.Patel, Surat
Respondent The ACIT.,Circle-3,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 18-11-2011
Date Of Final Hearing 03-11-2011
Next Hearing Date 03-11-2011
Assessment Year 2006-2007
Appeal Filed On 11-05-2009
Judgment Text
. .. . . .. . ! !! ! . .. .'# !'# '# !'# '# !'# '# !'# $ $ $ $ % % % % IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD BEFORE HONBLE SHRI D.K.TYAGI J.M. & HONBLE SHRI A.MOHAN ALANKAMONY A.M.) ! ! ! !. ITA NO. 1494/AHD./2009 : # &'- 2006-2007 SHRUTA K. PATEL SURAT V S- ACIT CIRCLE-3 SURAT (PAN : AHZPP 3866H) (*+ /APPELLANT) ( *+ /RESPONDENT ) *+ - . / APPELLANT BY : SHRI D.K.PARIKH *+ - . / RESPONDENT BY : SHRI SAMIR TEKRIWAL SR.D.R. /#0 - 1$ / DATE OF HEARING : 03/11/2011 2'& - 1$ / DATE OF PRONOUNCEMENT : 18/11/2011 3 3 3 3 / ORDER PER SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-V SURAT IN APP EAL NO.CAS- V/30/TRANS/2008-09 DATED 31.03.2009 FOR THE ASSESSM ENT YEAR 2006-2007 PASSED UNDER SECTION 250 R.W.S. 143(3) OF THE I.T. ACT 19 61. 2. THE ASSESSEE HAS RAISED AS MANY AS FIVE GROUNDS IN ITS APPEAL BUT GROUND NO.1 IS THE EFFECTIVE GROUND WHICH IS REPRODUCED HEREIN BELOW. 1. THAT THE CIT(A) ERRED IN CONFIRMING THE STCG INC OME OF RS.19 72 562/- AS BUSINESS INCOME. 3. DURING THE YEAR THE ASSESSEE HAS SHOWN LONG TER M AND SHORT TERM CAPITAL GAIN ON SALE OF SHARES. THE ASSESSEE ALSO DERIVES INTERE ST INCOME AND DIVIDEND INCOME. THE ASSESSEE FILED ITS RETURN OF INCOME ACCOMPANIED BY COMPUTATION OF INCOME COPY OF CAPITAL ACCOUNT BALANCE-SHEET ETC. ON 31.07.2006 DECLARING TOTAL INCOME AT ITA NO. 1494-AHD-09 2 RS.19 72 562/- WHICH WAS PROCESSED UNDER SECTION 1 43(1) OF THE ACT. SUBSEQUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND T HE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 30.09.2008. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON VERIFICATION OF BALANCE SHEET AND THE DETAILS FU RNISHED BY THE ASSESSEE THE LD. AO OBSERVED THAT THE ASSESSEE HAS TREATED PROFIT FROM THE TRADING ACTIVITIES OF SHARES AND UNITS AS SHORT TERM CAPITAL GAIN OF RS.19 72 562/ - AND LONG TERM CAPITAL GAIN ON SHARES OF RS.1 55 545/- AND ON UNITS OF RS.2 46 907 /-. THE LD. AO ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ABOVE SAID SHORT TERM AND LONG TERM CAPITAL GAIN ON SHARES AND UNITS SHOULD NOT BE TREATED AS INCOME FROM BUSI NESS. IN RESPONSE TO THE ABOVE SHOW-CAUSE NOTICE DATED 05.08.2008 THE A.R. OF THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION TO THE LD. A.O. HOWEVER SUBSEQUENT TO THE SHOW CAUSE NOTICED DATED 04.09.2008 THE ASSESSEE SUBMITTED A DETAILED REPLY . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE AO OBSERVED THAT THE ASSESSEE S CLAIM TO TREAT PROFIT FROM THE TRADING ACTIVITIES OF SHARES AS LONG TERM /SHORT TE RM GAINS IS NOT TENABLE DUE TO THE FOLLOWING REASONS: (I) THE MOTIVE OF THE ASSESSEE BEHIND THE TRANSACTIONS IS TO EARN TRADING PROFIT ONLY. (II) NATURE OF TRANSACTIONS CANNOT BE CONSIDERED AS INVE STMENT ACTIVITIES ON THE PARAMETERS OF FREQUENCY OF TRANSACTIONS. (III) THE OBSERVATIONS MADE BY THE HONBLE SUPREME COURT IN THE CASE OF CIT(CENTRAL) VS- ASSOCIATED INDUSTRIAL DEVELOPMENT COMPANY PVT. LTD. (82 ITR 586) SHOWS THAT THE ONUS IS ON THE ASS ESSEE TO DEMONSTRATE WITH EVIDENCE TO ESTABLISH ITS CLAIMS THAT THE SHAR ES HELD ARE FOR INVESTMENT. (IV) THE POINTS MENTIONED IN THE CBDT CIRCULAR NO.4/2007 DATED 16.06.2007 AND THE DECISION OF THE AUTHORITY FOR ADVANCE RULIN GS CITED IN 288 ITR 641 ARE AGAINST THE CONTENTIONS OF THE ASSESSEE. (V) FROM THE EXPENSES SHOWN IN P&L A/C. IT IS EVIDENT THAT THE ASSESSEE HAS A WELL ESTABLISHED INFRASTRUCTURE FOR TRADING IN S HARES AND THEREFORE IT COULD BE CONSTRUED THAT THE ACTIVITIES OF THE ASSES SEE ARE TO EARN PROFIT BY TRADING IN SHARES. ITA NO. 1494-AHD-09 3 (VI) THE ASSESSEE WAS EARNING HER INCOME FROM THE PROFIT ON SPECULATION TRANSACTION IN SHARES INTEREST DIVIDEND AND PROFI T FROM TRANSACTIONS RELATING TO TRADING IN THE SHARES ONLY WHICH SHOWS THAT THE NORMAL BUSINESS OF THE ASSESSEE IS NOTHING BUT TRADING OF SHARES. (VII) THE CONTENTION OF THE ASSESSEE THAT SHE IS INVESTIN G IN SHARES IS NOT TENABLE BECAUSE FOR INVESTING IN SHARES BORROWED FU NDS ARE NOT NORMALLY UTILIZED. 3.1 AFTER CONSIDERING THE SUBMISSION MADE BY THE AS SESSEE AND THE DECISIONS OF VARIOUS COURTS RELIED ON BY THE ASSESSEE AND FROM T HE AFORESAID OBSERVATIONS THE LD. AO TREATED THE SUM OF RS.19 72 562/- AND RS.1 55 54 5/- CLAIMED UNDER THE HEAD SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN RESPEC TIVELY AND GAINS ON SALE OF UNITS OF RS.2 46 907/- AS BUSINESS INCOME. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). THE LD. CIT(A) AFTER ANALYZING THE CONTENTION OF THE ASSESSEE AND CONSID ERING THE OBSERVATIONS MADE BY THE AO IN THE ASSESSMENT ORDER ARRIVED AT A FINDING TH AT THE CLAIM OF THE ASSESSEE ON SHORT TERM CAPITAL GAIN OF RS.19 72 562/- WAS NOT MAINTAI NABLE SINCE THE CIRCUMSTANCES REVEAL THAT THE ASSESSEES INCOME WAS FROM BUSINESS OF TRADING IN SHARE. IN RESPECT OF OTHER ADDITIONS OF LONG TERM CAPITAL GAIN OF RS.1 5 5 545/- ON SHARES AND OF RS.2 46 907/- ON UNITS THE LD. CIT(A) DELETED THE ADDITION MADE BY THE LD. A.O. THE RELEVANT PARA OF THE LD. CIT(A)S ORDER IS REPRODUC ED HEREINBELOW FOR REFERENCE. I HAVE CAREFULLY CONSIDERED THE VIEW TAKEN BY THE A O ON THIS ISSUE THE WRITTEN SUBMISSIONS MADE BY THE APPELLANT AND THE JUDGMENTS RELIED UPON. FROM THE ENTIRE DISCUSSION ABOVE I OBSERVED THAT THE APPELL ANT'S CONTENTION THAT SHE MADE INVESTMENTS OUT OF HER SAVINGS OF FIVE DECADES IS NOT IN CONFORMITY WITH HER AGE WHICH IS JUST 24. SECONDLY FREQUENCY AND H OLDING PERIOD OF TRANSACTION AS SUBMITTED BY THE APPELLANT IN PARA 1 - PAGE 5 OF HER SUBMISSION AND DISCUSSED BY THE AO ON PAGE 9 OF THE ASSESSMENT ORD ER. THIRDLY THE MOTIVE BEHIND THE TRANSACTION. ON AO'S PART HE HAS VERY CL EARLY ESTABLISHED CERTAIN PARAMETERS ON THE BASIS OF THE JUDGEMENTS REFERRED BY HIM OF WHICH I DISAGREE WITH HIM ON ISSUE OF HAVING EMPLOYED A RENOWNED BRO KER. TO HAVE GOOD RETURNS ON ONE'S INVESTMENTS ANY PRUDENT PERSON WOULD TAKE SUCH SERVICES. AS REGARD ITA NO. 1494-AHD-09 4 OTHER ISSUES IT IS NOT ONLY THE MOTIVE BUT THE FRE QUENCY AND MAGNITUDE OF THE TRANSACTIONS IN SAME SCRIP AND ALSO THE SHORT HOLDI NG PERIOD TOO CLEARLY SHOWS THAT THE PROFIT EARNED FROM SALE OF SHARES WAS IN T HE NATURE OF BUSINESS INCOME. IT WAS ALSO CLEARLY BROUGHT OUT BY THE AO THAT THE APPELLANT HAD TAKEN LOANS FROM VARIOUS PARTIES FOR THE PURPOSE OF TRADING IN SHARES AND UNITS AS THERE IS NO OTHER SOURCE OF INCOME. THE RATIO OF LOAN TO CAP ITAL COMES TO 4:1. THIS SHOWS THAT THE APPELLANT HAS TAKEN SUBSTANTIAL LOANS TO B UY THE SHARES FOR DOING BUSINESS AS NO PRUDENT PERSON WOULD TAKE LOANS FRO M MARKET OR EVEN FROM KITH AND KIN WHERE INTEREST RATES ARE 15% AND MORE TO E ARN APPRECIATION ON INVESTMENTS. THIS FACT OF BORROWING ALONG WITH OTHE R FACTS AS DISCUSSED ABOVE CLEARLY LEAD TO THE IRREFUTABLE CONCLUSION THAT THE CLAIM OF THE APPELLANT AGAINST STCG OF RS. 19 72 562/- WAS ESSENTIALLY THE APPELLA NT'S INCOME FROM BUSINESS OF SHARE DEALINGS. EVEN THE FACTS OF THE JUDGEMENT S RELIED UPON BY THE APPELLANT ARE DIFFERENT FROM THE FACTS OF THE APPELLANTS CAS E. HENCE THE AO'S ACTION OF TREATING THE SAID AMOUNT AS BUSINESS INCOME IS SUST AINED. HOWEVER THE AO SHOULD ALLOW THE DEDUCTION OF EXPENSES AGAINST SUCH INCOME. AS REGARD LTCG OF RS.1 55 545/- ON SHARES AND OF RS .2 46 907/- ON UNITS THE AO HAS TREATED THE SAME AS BUSINESS INCO ME. THE AO HAS NOT DISCUSSED THIS ISSUE IN DETAIL. THE APPELLANT IN HE R SUBMISSIONS HAS CONTENDED THAT THE UNITS WERE HELD BY THE APPELLANT AS LONG B ACK IN 1998-99. I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLANT AND ALSO THE ASSESSMENT ORDER. I FIND THAT NEITHER THE SALE NOR THE PURCHASE OF SUCH UNIT S HAVE BEEN DISPUTED. IT IS CLEAR FROM THE LENGTH OF THE HOLDING PERIOD THAT T HE GAIN EARNED FROM THE SALE OF SUCH UNITS COULD NOT BE TREATED AS BUSINESS INCO ME. NONE OF THE CRITERIA OR PARAMETERS APPLIED BY THE AO IN KEEPING WITH CIRCUL AR NO.4/2007 OF THE CBDT CAN BE APPLIED TO THE TRANSACTIONS INVOLVING SUCH U NITS. THE AO IS THEREFORE DIRECTED TO ALLOW THE ENTIRE LTCG AS CLAIMED BY THE APPELLANT. HENCE THE AO'S STAND OF TREATING THE LTCG AS BUSINESS INCOME DOES NOT HOLD GOOD. 5. THE LD. A.R. REITERATED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. AO DURING THE ASSESSMENT PROCEEDINGS AND STOUTLY ARGUE D BEFORE US THAT THE IDENTICAL ISSUE WAS INVOLVED IN THE CASE OF THE ASSESSEES GRANDMOT HER SUSHILABEN H. JARIWALA FOR THE ASSESSMENT YEAR 2005-06 IN WHICH THE SAME AO HAD T REATED SHORT TERM CAPITAL GAIN AS BUSINESS INCOME. THE LD. A.R. FURTHER SUBMITTED THA T THE ITAT D BENCH AHMEDABAD IN ITA NO.3494/AHD/2008 FOR THE ASSESSMEN T YEAR IN THE CASE OF SUSHILABEN H. JARIWALA DECIDED THE CASE VIDE ITS ORDER DATED 08.10.2010 IN FAVOUR OF THE ASSESSEE ON THE IDENTICAL ISSUE. THE LD. A.R. F URTHER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2007-08 THE SAME TREATMENT HAS BEE N GIVEN BY THE ASSESSEE AND IT HAS BEEN ACCEPTED BY THE AO IN THE SCRUTINY ASSESSMENT. THEREFORE THE LD. A.R. FINALLY ITA NO. 1494-AHD-09 5 CONCLUDED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE SIMILAR FACTS ACCEPTED BY THE AO IN THE ASSESSMENT ORDERS FOR THE ASSESSMENT YEAR 2005-06 AND 2007-08 AND THE DECISION DATED 08.10.2010 OF THE IT AT D BENCH AHMEDABAD IN ITA NO.3494/AHD/2008 ( SUPRA ). HENCE THE LD. A.R. PRAYED THAT THE ORDERS OF TH E LD. CIT(A) MAY BE CANCELLED AND THE APPEAL OF THE ASSES SEE MAY BE ALLOWED. 6. THE LD. D.R. RELIED ON THE ORDER OF THE LD. AO A ND ELABORATELY ARGUED ON THE LINES OF THE LD. A.O. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY PE RUSED THE MATERIALS FROM THE RECORD. AT THE OUTSET IT IS OBSERVED THAT THE ISSU E IS NOT COVERED IN FAVOUR OF THE ASSESSEE VIDE DECISION DATED 08.10.2010 OF THE ITA T D BENCH AHMEDABAD. IN ITA NO.3494/AHD/2008 FOR THE ASSESSMENT YEAR 2005-06 AS STATED BY THE ASSESSEE. ON PERUSING THE ORDER THE TRIBUNAL HAD CATEGORICALLY MADE A FINDING THAT THE ASSESSEE HAD CONSISTENTLY TREATED INVESTMENT PORT FOLIO AS SEPAR ATE AND DISTINCT. IT WAS ALSO OBSERVED BY THE TRIBUNAL THAT THE ASSESSEE HAD NOT TAKEN THE LOAN TO BUY THE SHARES. IT WAS FURTHER NOTED BY THE TRIBUNAL THAT THE ASSESSEE HAS CONTINUOUSLY SHOWN INVESTMENT IN THE BALANCE-SHEET WHICH IS MADE OUT OF HER OWN CAP ITAL AND SHOWN GAIN ON SALE OF SHARES AS EITHER STCG OR LTCG EVEN FOR THE ASSESSM ENT YEARS 2003-04 AND 2004-05. THE RELEVANT PARA OF THE ORDER IS REPRODUCED HEREIN BELOW. 5. WE FIND FROM RECORD THAT THE ASSESSEE ALSO SUBMI TTED PAPER BOOK FROM WHERE AT PAGE 15 IT IS NOTICED THAT ASSESSEE HAD MA INTAINED BOTH THE PORTFOLIOS AND WHEN THESE SHARES WERE HELD FOR A PERIOD OF 4-5 YEARS OR EVEN 10-12 YEARS IT WAS ALWAYS TREATED AS INVESTMENTS ON LTCG BASIS AND IN RESPECT OF STCG THE INVESTMENT WAS REALIZED WHEN THERE WAS FAVOURABLE M ARKET QUOTATION. WE FIND THAT IN RESPECT OF LTCG WHEN THE HOLDING PERIOD HAS BEEN MORE THAN 365 TO 376 DAYS THAT THE ENTIRE GAIN HAS BEEN TREATED AND CONFIRMED AS BUSINESS INCOME BY THE' ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE ASSESSEE CONSISTENTLY HAD TREATED INVESTMENT PORTFOLIO AS SE PARATE AND DISTINCT AND EVEN IN EXACTLY IDENTICAL SITUATION FOR ASSESSMENT YEAR 2004-05 IN THE SCRUTINY ASSESSMENT U/S. 143(3} DATED 06-12-2006 THE INCOME FROM SHARE TRANSACTIONS HAS BEEN ACCEPTED AS CAPITAL GAIN. THE ASSESSMENT O RDER FOR ASSESSMENT YEAR 2004-05 IS PLACED AT PAGE 22 AND 23 OF ASSESSEE'S P APER BOOK WHEREIN AT PARA- 4 OF ASSESSMENT ORDER AFTER VERIFICATION OF DETAILS OF PURCHASE AND SALE OF SHARES AND DETAILS OF TRANSACTION WITH REGARD TO CAPITAL G AIN WAS ACCEPTED AS PER RETURN. THE DETAILED STATEMENT OF INCOME FOR ASSESS MENT YEAR 2004-05 IS AT PAGE 76-90 OF ASSESSEE'S PAPER BOOK WHEREIN ALSO EVEN W ITH THE FREQUENCY OF ITA NO. 1494-AHD-09 6 TRANSACTIONS THE TRANSACTIONS WERE ON INVESTMENT A CCOUNT STCG AND LTCG WERE ACCEPTED. WE ARE OF THE VIEW THAT EXACTLY ON T HE SAME FACTS THERE WAS NO JUSTIFICATION FOR TAKING DIFFERENT VIEW TO TREAT TH AT CAPITAL GAIN AS BUSINESS INCOME FOR THE YEAR UNDER CONSIDERATION. HOWEVER C IT(A) FAILED TO APPRECIATE THE VARIOUS CASE LAWS ON CONSISTENCY WHICH WEE BRO UGHT TO HIS NOTICE PARTICULARLY THE DECISION OF THE SUPREME COURT IN T HE CASE OF RADHASWAMI SATSANG V. CIT 100 CTR 367 (SC) 193 ITR 321 (SC) WH ICH WAS BROUGHT TO HIS NOTICE AT PAGE 14 OF ASSESSEE'S PAPER BOOK. HOWEVER THE CIT(A) ERRED IN HOLDING THAT THE ASSESSEE HAD TAKEN SUBSTANTIAL LOA N TO BUY THE SHARES AND INTEREST AT 15% WAS BORNE BY THE ASSESSEE AS THIS O BSERVATION IS WHOLLY INCORRECT AND QUITE CONTRARY TO THE FACTS ON RECORD . WE FIND FROM PROFIT AND LOSS ACCOUNT AT PAGE 29 OF ASSESSEES PAPER BOOK THAT NO T A SINGLE RUPEE BY WAY OF INTEREST HAS EVER BEEN EXPENDED OR PAID AND PARTICU LARS OF PROFIT AND LOSS ACCOUNT ARE ALREADY THERE AT PAGE 28 AND STATEMENT OF INCOME AT PAGE 52-75 CLEARLY SHOWS THAT OUT OF THE VARIOUS EXPENSES MENT IONED AT PAGE 28 OF ASSESSEE'S PAPER BOOK. THE ASSESSEE HAS CLAIMED ONL Y EXPENSES OF RS.35 546/- AND THAT TOO ONLY AGAINST OTHER INCOME OF SPECULATI ON WHICH IS SEPARATELY KEPT IN THE PORTFOLIO. IN THIS REGARD DECISION OF THE M UMBAI TRIBUNAL IN THE CASE OF CIT V. GOPAL PUROHIT 228 CTR 582 (BOM) WHICH IS PLA CED AT PAGE 13-14 OF ASSESSEE'S PAPER BOOK-II WHEREIN THE HON'BLE HIGH COURT HAS OBSERVED THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT THERE OUGHT TO BE UNIFORMITY IN TREATMENT AND CONSISTENCY WHEN THE FACTS AND CIRCUMSTANCES AR E IDENTICAL. UNDER THE ABOVE CIRCUMSTANCES THE CAPITAL GAIN OFFERED OUGHT TO HAVE BEEN ACCEPTED INSTEAD OF TREATING THE LTCG AS WELL AS STCG AS BUS INESS INCOME. WE FIND THAT CBDT CIRCULAR HAS LAID DOWN CRITERIA FOR ASSESSING SHARE INCOME AS LTCG AND STCG AND ALSO VARIOUS CASE LAW HAVE BEEN RELIED UPO N PARTICULARLY IN THE CASE OF GOPAL PUROHIT (SUPRA) AND IN THE CASE OF NSS INV ESTMENT 158 TAXMAN PAGE 38 (MAD). WE FIND THAT IN A SERIES OF CASES THE ISS UE HAS BEEN CONSIDERED BY VARIOUS BENCHES OF TRIBUNAL OF MUMBAI AS WELL AS AH MEDABAD AND HON'BLE COURTS HAVE TAKEN A VIEW THAT ONE CANNOT GO TO DECI DE MERELY ON THE BASIS OF FREQUENCY OR VOLUME OF TRANSACTIONS IN THE CURRENT SCENARIO IN WHICH THE PERSONS ARE INVESTING MORE AND MORE AS AN INVEST OR IN THE STOCK MARKET. MOST CRUCIAL IS THAT ASSESSEE HAS CONTINUOUSLY SHOWN INV ESTMENT IN THE BALANCE SHEET WHICH IS MADE OUT OF HER OWN CAPITAL AND SHOWN GAIN ON SALE OF SHARES AS EITHER STCG OR LTCG EVEN FOR ASSESSMENT YEARS 2003-04 AND 2004-05 AND HENCE WITHOUT THERE BEING ANY CHANGE IN THE FACTS A CONSI STENT VIEW NEEDS TO BE ADOPTED. THIS HAS BEEN SO HELD IN THE CASE OF GOPAL PUROHIT (SUPRA). 7.1 FOR THE RELEVANT PREVIOUS YEAR 2005-06 IN THE C ASE OF THE ASSESSEE BEFORE US THE LD. A.OS FINDINGS ARE REPRODUCED HEREINBELOW: I) THE ASSESSEE HAS TRANSACTED FREQUENTLY ON 85 SCR IPS AND IN EVERY SCRIP THE ASSESSEE HAS TRANSACTED ON AN AVERAGE OF 10 TIMES. II) THE ASSESSEES MAGNITUDE OF SALE AND PURCHASE OF SHARES WAS RUNNING INTO CRORES OF RUPEES DURING THE YEAR. THE ASSESSEE WAS USING HER SOURCE OF FUNDS TO ITA NO. 1494-AHD-09 7 GENERATE PROFIT FROM THE SALE AND PURCHASE OF SHARE S. THE MAGNITUDE OF TRANSACTION QUANTITATIVELY WAS ALSO HIGH. III) MOST OF THE SHARES WERE HELD FOR LESS THAN 45 DAYS MAKING IT OBVIOUS THAT THE INTENTION OF THE ASSESSEE WAS TO TRADE IN SHARE S. IV) THE ASSESSEE WAS DEALING HER TRANSACTION THROU GH THE RENOWNED BROKER M/S. KOTAK SECURITIES AND ALSO INCURRING EXPENSES I N THE NATURE OF OFFICE EXPENSES SALARIES STAMP AND OTHER CHARGES TRAVEL LING EXPENSES ETC. V) THE SCALE OF THE EXPENSES INCIDENTAL TO TRANSAC TION OF SHARES OF SALE AND PURCHASE SHOWS THAT THE ASSESSEE IS MAKING PURCHASE S AND SALES OF SHARES WITH THE INTENTION TO EARN PROFIT. VI) THE ASSESSEE HAS ALSO OBTAINED LOAN FROM VARIO US PARTIES TO THE EXTENT OF RS.52 36 155/- FROM MRS. REKHA H. JARIWALA AND RS.4 1.07.699/- FROM MRS. S.H.JARIWALA. VII) TO SUM UP THE LD. A.O. TABULATED HIS FINDIN GS WHICH ARE REPRODUCED HEREINBELOW: SR. PARAMETERS TO DECIDE BUSINESS NATURE NO. THE NATURE OF TRANSACTION 1. MOTIVE BEHIND SUCH INVESTMENT : PROFIT MOTIVE 2. FREQUENCY OF TRANSACTIONS : BUSINESS SCALE 3. MAGNITUDE OF SALE AND PURCHASE : SUBSTANTIAL 4. LENGTH OF PERIOD OF OWNERSHIP : LESS THAN 45-60 DAYS 5. THE INFRASTRUCTURE EMPLOYED FOR : BUSINESS SCAL E THE SHARE TRANSACTIONS 6. NORMAL BUSINESS OF ASSESSEE : SHARE TRANSACTION 7. WHETHER ASSESSEE HAS OBTAINED : YES SUBSTANTIA L LOANS OF LOANS AROUND RS.95 LACS 7.2 BEFORE THE LD. CIT(A) THE ASSESSEE HAS NOT COM E OUT WITH ANY MATERIALS TO DISREGARD THE FINDINGS OF THE LD. A.O. EVEN BEFORE US AT THIS STAGE NO EVIDENCE WAS BROUGHT OUT TO SUBSTANTIATE THE CLAIM OF THE ASSESS EE THAT THE GAIN OF RS.19 72 562/- AROSE DUE TO SHORT TERM CAPITAL GAIN. FROM THE FACT S AND CIRCUMSTANCES OF THE CASE FOR ITA NO. 1494-AHD-09 8 THE RELEVANT PREVIOUS YEAR WE ARE LEFT WITH NO OTH ER OPTION RATHER THAN TO CONFIRM THE ORDER OF THE LD. CIT(A). IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. 4 3 - 2'& 5#!' 18 / 11 /2011 ' 6 - 0 7 THIS ORDER PRONOUNCED IN COURT ON 18/11/2011. 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