I.T.O. Vs. DEVIKA R. AGRAWAL

JUDGEMENT

(1.) THESE are two appeals filed by the Revenue against the order of the Commissioner of Income -Tax (Appeals) -VI, Ahmedabad dated 28.2.2011 for Asstt. Year 2007 -08 and 19.5.2011 for Asstt. Year 2008 -09. In both the appeals, the Revenue has taken the following common grounds of appeals:

(2.) BRIEF facts of the case are that in Asstt. Year 2007 -08, the AO observed that during the year under consideration, the assessee has shown income from purchase and sale of shares in normal trades of Rs. 4,22,844/ - and through portfolio management scheme ("PMS") of Rs. 49,80,932/ - aggregating to Rs. 54,03,776/ -. He observed that in Asstt. Year 2006 -07, the assessee has indulged in similar modus operandi of transactions in shares through PMS and through normal sales through BSE/NSE in respect of sale of equities. Accordingly, short -term and long term capital gain shown by the assessee was taxed as business income. Therefore, in the assessment year under consideration also, facts being identical, the income from transactions in shares is taxed as business income of the assessee.

(3.) ON appeal, the CIT(A) accepted the appeal of the assessee, and directed the AO not to treat these transaction as business as against capital gain disclosed by the assessee by observing as under: