CIT Vs. AMIT JAIN

JUDGEMENT

(1.) By an order dated 25.09.2013, the following question of law was framed: - Whether the transaction in question was rightly held by the Tribunal in the nature of investment and not in the nature of trade?

(2.) The facts of the case are that for assessment year (AY) 2006-07, the assessee had reported an amount of '2.61 crores as short term capital gain as against a total assessed income of '2.63 crores. Besides short term capital gain, the assessee had also reported a sum of Rs. 47.14 lakhs as long term capital gains which was accepted. In the scrutiny assessment, the AO formed an opinion that the assessee's claim of '2.61 crores being short term capital gains was not admissible having regard to the nature of the transaction. The assessee had during the relevant assessment year traded in 329 scripts (as against the 1833 scripts held by him). Having regard to the frequency and volume of the transaction and the further circumstance that the assessee did not report any other form of income in his returns, the AO felt that short term capital gain as claimed was inadmissible and brought the sum of Rs.2.61 crores to tax under the head "business income".

(3.) The assessee's appeal was rejected by the CIT (Appeals) by a reasoned order. On further appeal to the Income Tax Appellate Tribunal (ITAT), the Tribunal accepted the assessee's contentions.