ITO 32(2)(3), MUMBAI vs. MUKUND T PARMAR, MUMBAI

business.After disallowing expenses of Rs. 1.11 lakhs,he determined the business income of the assessee at Rs.12.09 crores. 3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority (FAA) and made elaborate submissions. He also relied upon certain case laws and Circular issued by the Central Board of Direct Taxes on 29/02/2016 (Circular Number 6/2016). After considering the available material, the FAA held that the AO had made the addition to the total income of the assessee by treating income from sale of shares as business income primarily because similar views was taken by the then AO in the assessment for the immediately preceding year,that on the same facts the appeal filed by the assessee was allowed by his predecessor,that the assessee had consistently shown the shares, which led to capital gain,as investment in his balance sheet, that the question of treatment of income arising out of sale of shares had been conclusively decided by the CBDT in its Circular No.6,dated 29/02/2016,that the assessee had opted to treat the shares as investment rather than as stock in trade, that he had been showing the income arising out of the sale of shares which were not in the nature of F & O segment, as income under the head capital gains,that he was consistently following the practice of showing income arising out of sale of shares in the F and O segment as business income,that the income arising out of sale of shares, which had been treated by the AO as business income,had to be treated as income from capital gains.Finally,he allowed the appeal filed by the assessee. 4.During the course of hearing before us,the Departmental Representative (DR) supported the order of the AO and stated that the assessee was carrying out systematic business activities,that he was not an investor, that pattern of holding and selling the shares proved that he was a Trader of shares.As stated earlier, none appeared on behalf of the assessee. 5.We have perused the material available on record and heard the DR. We find that the AO had held that income arising from sale of shares was to be treated as business income,that the assessee had shown income under the heads LTCG and STCG on sale of shares, that it had also shown business income for the F and O segment,that he was not showing the shares as stock in trade, that the shares were treated as investment in the balance sheet, that he was following the said practice consistently over the years.No authority is required to state that an assessee can be a trader and an investor for the same assessment year.The CBDT circular, referred to by the FAA,has recognised the principle of holding two portfolios by an assessee. Considering the above,we are of the opinion that the order of the FAA does not suffer from 4936/M/16-Mukund T.Parmar