{"id":2766,"date":"2011-03-02T12:53:50","date_gmt":"2011-03-02T07:23:50","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=2766"},"modified":"2011-03-02T12:53:50","modified_gmt":"2011-03-02T07:23:50","slug":"acit-vs-naishadh-v-vachharajani-itat-mumbai-despite-high-volume-short-holding-period-shares-gain-is-stcg","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/acit-vs-naishadh-v-vachharajani-itat-mumbai-despite-high-volume-short-holding-period-shares-gain-is-stcg\/","title":{"rendered":"ACIT vs. Naishadh V. Vachharajani (ITAT Mumbai)"},"content":{"rendered":"\n\n
Click here to download the judgement (vachharajani_shares_stcg_business_income.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nDespite high volume & short holding period, shares gain is STCG
\n<\/strong><\/p>\n

The assessee, a marine consultant, offered income by way of LTCG, STCG, speculative profit & profit from futures trading. The AO held that as the volume of transactions was high<\/em> (222), the period of holding of the STCG shares was short<\/em> (2 -5 Months) & there was speculation & F&O profit<\/em>, the LTCG & STCG was assessable as business profit<\/em>. On appeal, the CIT (A) reversed the AO. On appeal by the department, HELD dismissing the appeal:<\/p>\n

(i) As regards the LTCG, the shares were held for several years and so the assessee has acted as investor and not as a trader and so the gains are assessable as LTCG;<\/p>\n

(ii) As regards the STCG, the view of the CIT(A) had to be upheld because <\/p>\n

(a) there was no intra-day trading,
\n(b) most of the shares were held for a period of 2 to 5 months,
\n(c) In the preceding AY, the AO did not assess the STCG as business income and on the principles of consistency, a different view cannot be taken on the same facts,
\n(d) the assessee has no borrowings and
\n(e) merely because there was a speculative business does not mean that even delivery based transactions of shares should be assessed under the head business.<\/p><\/blockquote>\n

\nFor more see SMK Shares & Stock Broking<\/a><\/strong>, Nehal V. Shah<\/strong><\/a>, Vinod K. Nevatia<\/strong><\/a>, Gopal Purohit<\/strong><\/a> 228 CTR 582 (Bom), PNB Finance & Industries<\/strong><\/a> (Delhi High Court), Management Structure & Systems<\/strong><\/a> 41 DTR 426, Paresh D. Shah<\/strong> 2 ITR 311 (Trib) & Smt. Sadhana Nabera<\/strong><\/a> (contra)\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Despite high volume & short holding period, shares gain is STCG <\/p>\n

Read more ›<\/a><\/div>\n

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