JUDGMENT : M.R. Shah, J. 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad "C" Bench, Ahmedabad (hereinafter referred to as "the learned tribunal") dated 04/04/2016 in ITA No. 168/Ahd/2012 for the Assessment Year 2008-09, revenue has preferred the present Tax Appeal with the following proposed question of law; "Whether in the facts and circumstances of the case, learned ITAT has erred in law and on facts in not considering surplus of Rs. 2,03,86,894/- earned by the respondent assessee from sale of shares as business income instead of short term capital gain?" 2. The facts leading to the present Tax Appeal in a nutshell are as under; 2.1 The respondent - assessee is an individual who derives income from salary income from business. He is also dealing in shares. The assessee filed the return of income for the Assessment Year 2008-09 declaring the total income of Rs. 1,93,12,540/-. The case of the assessee was selected for scrutiny assessment. Thereafter, notice under Section 143(2) of the Income Tax Act (hereinafter referred to as "the Act") was issued on 19/08/2009 and served upon the assessee. During the year under consideration the assessee disclosed short term capital gain of Rs. 2,04,87,755/-, business loss of Rs. 14,64,380/- and speculation income of Rs. 87,595/-. The assessee also claimed exemption of dividend income of Rs. 11,598/- and gift of Rs. 10,005/-. The assessee was issued show cause notice as to why the income derived on sale of shares amounting to Rs. 2,04,87,755/- shown as short term capital gain should not be treated as income from business. In reply thereto assessee submitted that the assessee has been dealing in shares and securities as investor till the end of Financial Year 2006-07 and during the year under appeal he had shown gain from sale of shares, which were acquired prior to Financial Year 2007-08 as income from capital gain and profit from dealing in shares and thereafter it has been shown as business income. The Assessing Officer was not convinced with the reply and disallowed the claim of the assessee for short term capital and treated the same as business income. The Assessing Officer assessed the income at Rs. 1,93,34,140/- and short term capital gain from sale of shares was taxed as business income. The Assessing Officer was not convinced with the reply and disallowed the claim of the assessee for short term capital and treated the same as business income. The Assessing Officer assessed the income at Rs. 1,93,34,140/- and short term capital gain from sale of shares was taxed as business income. Feeling aggrieved and dissatisfied with the order passed by the Assessing Officer disallowing the claim of the assessee for short term capital gain of Rs. 2,04,87,755/- and treating the same as business income, the assessee preferred Appeal before the learned CIT(A). The learned CIT(A) deleted the addition made by the Assessing Officer of Rs. 2,04,87,755/-, which was treated as business income, by accepting the contention on behalf of the assessee and by treating the profit from sale of shares of Rs. 2,04,87,755/- as short term capital gain instead of business income as assessed by the Assessing Officer. Feeling aggrieved and dissatisfied with the order passed by the learned CIT(A) in deleting the addition made by the Assessing Officer of Rs. 2,04,87,755/- and treating the same as short term capital gain instead of business income as assessed by the Assessing Officer, revenue preferred Appeal before the learned tribunal, being ITA No. 168/Ahd/2012. By the impugned judgment and order, the learned tribunal has dismissed the said Appeal and confirmed the order passed by the learned CIT(A). Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned tribunal, revenue has preferred the present Tax Appeal with the following proposed question of law; "Whether in the facts and circumstances of the case, learned ITAT has erred in law and on facts in not considering surplus of Rs. 2,03,86,894/- earned by the respondent assessee from sale of shares as business income instead of short term capital gain?" 3. We have heard Shri Varun K. Patel, learned advocate appearing on behalf of the revenue at length. We have considered the order passed by the Assessing Officer, learned CIT(A) as well as the learned tribunal. It appears that the Assessing Officer treated the income of short term capital gain of Rs. We have heard Shri Varun K. Patel, learned advocate appearing on behalf of the revenue at length. We have considered the order passed by the Assessing Officer, learned CIT(A) as well as the learned tribunal. It appears that the Assessing Officer treated the income of short term capital gain of Rs. 2,04,87,755/- as business income on the ground that in the audit report in form No. 3CD it was clearly mentioned that the assessee was engaged in the business of trading in shares and securities and also voluminous purchase and sale of shares, and therefore, on the aforesaid ground, the Assessing Officer disallowed the claim of the assessee for short term capital gain and treated the same as business income. However, on appeal, the learned CIT(A) has deleted the addition made by the Assessing Officer by treating profit from sale of shares of Rs. 2,04,87,755/- as short term capital gain instead of business income as assessed by the Assessing Officer by observing in paragraph 2.3 and 2.4 as under; "I have carefully considered the rival submissions. I have also gone through the assessment order and submissions of the learned A.R. After taking in view of material available on records and the legal position on this issue, I am inclined to agree with the submissions of the learned A.R. for the following reasons: (i) It is seen that appellant has claimed short term capital gain in respect of 54 transactions only. These transactions being small in number, it cannot be said that appellant was engaged in the business of trading of shares. (ii) As per the CBDT Circular No. 4/2007, dated 15/06/2007, most important criteria to be applied for treating the share transaction as investment is the treatment given by the appellant to these transactions in his balance sheet. It is seen that appellant has claimed sale proceeds of stocks as short term capital gain in respect of 7/8 scrips only. Most of these scrips were purchased in the immediately preceding A.Y. i.e. A.Y. 2007-08. It is seen that appellant has claimed sale proceeds of stocks as short term capital gain in respect of 7/8 scrips only. Most of these scrips were purchased in the immediately preceding A.Y. i.e. A.Y. 2007-08. In the balance sheet of A.Y. 2007-08 i.e. F.Y. 2006-07 appellant has declared investments in the following shares; (1) HDFC Flating Rate Income Fund (2) Kotak Bond Fund (3) Hindustan Unilever Ltd. (4) ICICI Bank Ltd. (5) Lok Housing Construction Ltd. (6) NTPC Ltd. (7) Parshwanath Developers Ltd. (8) Reliance Communication Ltd. (9) Tata Consultancy Services Ltd. Appellant had claimed short term capital gain against transactions of these scrips. Since purchase of these shares was declared by the appellant in his books of account as investment, accordingly sale proceeds in respect of these shares should be taxed as capital gain. 2.4. C.B.D.T. Circular was issued in the year 2007. Law on this issue has further evolved after issue of this circular. Hon'ble Mumbai High Court in the case of Gopal Purohit v. JCIT, 209 SOT 117 and Hon'ble Lucknow ITAT in the case of Sarnath Infrastructure Pvt. Ltd. v. ACIT, 122 TTJ 216 it is held that it is open to the assessee to maintain two separate portfolios, one relating to investment and another relating to business activities involving dealing in shares. The tribunal had correctly held that the delivery based transactions in the present case, should be treated as those in the nature of investment transactions and the profit received should be treated as those in the nature of investment transactions and the profit received therefrom should be treated as short term capital gains or as the case may be long term capital gains, depending upon the period of holding. These cases are regularly followed by Hon'ble Ahmedabad ITAT also. As the record indicates that shares in question were registered in the name of appellant, thus it can be safely said that the transactions are delivery based, accordingly respectfully following the ratio of above decisions, sale proceeds in respect of these shares should be treated as capital gains." The aforesaid findings of the learned CIT(A) has been confirmed by the learned tribunal by observing in paragraph 11 as under; "11. The major amount of capital gain is in relation to scrips in the name of Lok Housing and Construction Ltd. of which assessee has sold 4,37,000 shares and has earned a capital gain of Rs. 2,03,86,894/-. In order to further examine the transactions of sale of shares of Lok Housing and Construction Ltd. we find that assessee applied for acquiring fully convertible warrants of this company on 26th February, 2006 and paid 10% i.e. Rs. 4.60 per warrant for 95,000 warrants at the time of application. Thereafter on 10/05/2006 warrants were allotted to the assessee for an amount of Rs. 4,37,000/- which is duly appearing in the balance sheet of assessee as on 31st March, 2007 under the investment in shares head. Thereafter in the beginning of F.Y. 2007-08 assessee in order to get warrants converted into equity shares paid the balance amount i.e. 90% which works out at Rs. 39.33 lacs and acquired the equity shares of the company and got it in demat form. All these shares were sold in between 01/08/2007 and 05/02/2008. The assessee paid interest on borrowed funds for paying Rs. 39.33 lacs towards balance amount of allotment money for converting warrants into shares and paid interest of Rs. 8,48,296/- to his father in law and uncle in law from whom fund was borrowed and also did not claim this interest expenditure against business income. This shows that gain of Rs. 2,03,86,984/- from sale of shares of Lok Housing & Construction Ltd. got its origination in the previous year when warrants were acquired by paying 10% of the cost of warrants." 3.1 Considering the fact the major amount of capital gain is in respect of script in the name of Lok Housing and Construction Ltd. of which the assessee has sold 4,37,000 shares and has earned a capital gain of Rs. 2,03,86,894/- and that the assessee applied for acquiring fully convertible warrants of the said Company on 26/02/2006 and paid 10% i.e. Rs. 4.60 per warrant for 95,000 warrants at the time of application and thereafter on 10/05/2006 warrants were allotted to the assessee for an amount of Rs. 4,37,000/-, which duly appeared in the balance sheet as on 31.03.2007 under the investment in shares head and thereafter in the beginning of Financial Year 2007-08 assessee in order to get warrants converted into equity shares paid the balance amount i.e. 90% i.e. Rs. 4,37,000/-, which duly appeared in the balance sheet as on 31.03.2007 under the investment in shares head and thereafter in the beginning of Financial Year 2007-08 assessee in order to get warrants converted into equity shares paid the balance amount i.e. 90% i.e. Rs. 39.33 lakhs and acquired the equity shares of the company and got it in demat form and all the aforesaid shares came to be sold in between 01/08/2007 and 05/02/2008, the learned tribunal noticed that the assessee paid the interest on borrowed funds for paying Rs. 39.33 lakhs towards balance amount of allotment money for converting warrants into shares and paid interest of Rs. 8,48,296/- to his relatives from whom fund was borrowed, however, did not claim the said interest expenditure against business income. 3.2 Considering the aforesaid facts and circumstances of the case, it cannot be said that the learned tribunal has committed any error in confirming the order passed by the learned CIT(A) deleting the addition made by the Assessing Officer of Rs. 2,04,87,755/-, which was made treating the same as income from business. We are in complete agreement with the view taken by the learned tribunal. We see no reason to interfere with the impugned judgment and order passed by the learned tribunal. No substantial question of law arises in the present Tax Appeal. 4. In view of the above and for the reasons stated hereinabove, the present Tax appeal deserves be dismissed and is accordingly dismissed. .