Activity of share transaction would be treated as investment activity and not as business activity

IT: Where no funds were borrowed for purchasing shares, scrips were not repeatedly and frequently sold and purchased, and there was relatively long holding period, activity of share transaction would be treated as investment activity and not as business activity
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[2014] 49 taxmann.com 319 (Mumbai - Trib.)
IN THE ITAT MUMBAI BENCH 'B'
Nalin Pravin Shah
v.
Additional Commissioner of Income-tax*
B.R. Mittal, JUDICIAL MEMBER
AND Rajendra, ACCOUNTANT MEMBER
IT Appeal Nos. 1575 & 1594 (Mum.) of 2012
[ASSESSMENT YEAR 2007-08]
JANUARY  10, 2014
Section 45, read with section 28(i), of the Income-tax Act, 1961 - Capital gains - Chargeable as (Capital gains v. business income - Share dealing) - Assessment year 2007-08 - Assessee made investment in shares through portfolio manager's (PMS) service - Assessee had not taken any borrowed funds - Average holding period of shares was more than two months - Whether profit earned on sale/purchase of shares and securities through PMS was to be assessed as capital gains and not as business income - Held, yes [Para 8] [In favour of assessee]
Section 45, read with section 28(i), of the Income-tax Act, 1961 - Capital gains - Chargeable as (Capital gains v. business income - Share dealing) - Assessment year 2007-08 - In respect of shares which revenue held to be investment in earlier years, assessee had not borrowed any funds to undertake activities of purchase and sale of shares; assessee had used his own funds - Shares were held by assessee for a period of more than 24 months - Whether order of Commissioner (Appeals) to consider gain from sale of those shares as business income was not based on facts; same was to be treated as long-term capital gains - Held, yes [Para 18] [In favour of assessee]