JUDGMENT judgment of court was delivered by S. Ravindra Bhat J.-By order dated September 25, 2013, following question of law was framed: "Whether transaction in question was rightly held by Tribunal in nature of investment and not in nature of trade?" facts of case are that for assessment year (AY) 2006-07, assessee had reported amount of Rs. 2.61 crores as short-term capital gains as against total assessed income of Rs. 2.63 crores. Besides shortterm capital gains, assessee had also reported sum of Rs. 47.14 lakhs as long- term capital gains which was accepted. In scrutiny assessment, Assessing Officer formed opinion that assessee's claim of Rs. 2.61 crores being short-term capital gains was not admissible having regard to nature of transaction. assessee had during relevant assessment year traded in 329 scrips (as against 1833 scrips held by him). Having regard to frequency and volume of transactions and further circumstance that assessee did not report any other form of income in his return, Assessing Officer felt that short-term capital gains as claimed was inadmissible and brought sum of Rs. 2.61 crores to tax under head "Business income". assessee's appeal was rejected by Commissioner of Income-tax (Appeals) by reasoned order. On further appeal to Income-tax Appellate Tribunal ("the ITAT"), Tribunal accepted assessee's contentions. basis of Income-tax Appellate Tribunal's findings may be found from following extracts: "10. Let us consider facts discussed by learned Revenue authorities below in impugned orders. According to assessee, primary intention for making investment in shares is to earn dividend income, to keep capital funds available with assessee intact, to ensure that capital invested in shares grow over period of time on account of capital appreciation and to be part of growth of investee company. He demonstrated on record that he has been making investment from last two decades as investor. past history available on pages 223, 234, 379 and 420 of paper book depicts following position in respect to his investment: Assessment In Assessment year return of -income LTCG and Intimation under section 143(1) of 2003-04 STCG Income-tax Act, 1961 (the Act) LTCG and Intimation under section 143(1) of 2004-05 STCG Act. Assessment under section 143(3) LTCG and 2005-06 of Act, accepting appellant as STCG investor if and gains as capital gains. LTCG and LTCG= Accepted by Assessing 2006-07 STCG Officer STCG=In dispute. LTCG and Intimation under section 143 of 2007-08 STCG Act. Assessment under section 143(3) LTCG and 2008-09 of Act, accepting long-term STCG capital gains declared in return. 11. It also emerges out from record that assessee being investor has not been maintaining any office established or keeping any staff. He is also not registered with any authority or body such as stock exchange and SEBI, etc. He is not maintaining regular books of account but submitted details in respect of investment before Assessing Officer. He has not classified shares held by him as stock-in-trade. entire portfolio is valued at cost and not at cost or market price, whichever is lower, because that can only be applied if shares were held as stock-in-trade. He is not having any current account and is only maintain savings bank account. entire investment has been made out of his own fund and not out of borrowed funds. entire investment has been held by assessee in his own name and not in name of any business entity, i.e., firm, etc. According to assessee, he has received substantial dividend income of Rs. 10.10 lakhs. learned counsel for assessee at time of hearing pointed out that dividend yield on investment was around 2.10 per cent. which is much higher than normal expected yield of 1.5 per cent. on shares invested. For buttressing this aspect, he drew our attention towards indices of sensex. He placed on record these details." It is contended on behalf of Revenue that regardless of how assessee considered nature of transactions, proper application of legal tests, would result in treatment of sum of Rs. 2.61 crores as business income. Learned counsel relied upon judgment of Gujarat High Court in CIT v. Rewashanker A. Kothari [2006] 283 ITR 338 (Guj) which had formulated following tests to decide whether nature and character of sums reported as income are truly business income or on account of capital gains (page 344): "(a) first test is whether initial acquisition of subject matter of transaction was with intention of dealing in item, or with view to finding investment. If transaction, since inception, appears to be impressed with character of commercial transaction entered into with view to earn profit, it would furnish valuable guideline. (b) second test that is often applied is as to why and how and for what purpose sale was effected subsequently. (c) third test, which is frequently applied, is as to how assessee dealt with subject matter of transaction during time asset was with assessee. Has it been treated as stock-in-trade, or has it been shown in books of account and balance-sheet as investment. This inquiry, though relevant, is not conclusive. (d) fourth test is as to how assessee himself has returned income from such activities and how Department has dealt with same in course of preceding and succeeding assessments. This factor, though not conclusive, can afford good and cogent evidence to judge nature of transaction and would be relevant circumstance to be considered in absence of any satisfactory explanation. (e) fifth test, normally applied in cases of partnership firms and companies, is whether deed of partnership or memorandum of association, as case may be, authorises such activity. (f) last but not least, rather most important test, is as to volume, frequently, continuity and regularity of transactions of purchase and sale of goods concerned. In case where there is repetition and continuity, coupled with magnitude of transaction, bearing reasonable proportion to strength of holding, then inference can readily be drawn that activity is in nature of business." above ruling was approved and applied in judgment of this court in CIT v. Central News Agency Pvt. Ltd. (I.T.A. No. 1032 of 2011, decided on September 9, 2014)-since reported in [2015] 373 ITR 399 (Delhi). Learned senior counsel for assessee contended that record clearly indicates that as against 1,833 shares held by assessee, only 329 were traded at relevant time. Of Rs. 2.61 crores claimed as short-term capital gains, Rs. 1.72 crores were derived from sale of 35 scrips; counsel emphasises that this denoted 65 per cent. of short-term capital gain reported during assessment year. It was further submitted that for all relevant past years up to 2005-06 and even subsequently including periods when scrutiny assessments were made, Revenue uniformly accepted assessee's arguments that such income was on account of short-term capital gain and had no occasion to doubt it, or treat amounts as derived from business income. Emphasising need for consistency, learned counsel for assessee submitted that for current assessment year, i.e., assessment year 2006-07, for Revenue to successfully state that character of income is otherwise, some unique facts or evidence had to be placed on record-both of which were absent. Learned counsel, lastly, submitted that conclusions of Assessing Officer and Commissioner of Income-tax (Appeals) were largely based on fact that volume and transaction was considerable and yielded substantial income. factors which courts and tribunals have to take into consideration whilst deciding whether income gained during particular period is business income through purchase and sale of shares or other tradable capital assets, or capital gains on account of sale of such assets, has been spelt out and reiterated in number of decisions. These include Raja Bahadur Visheshwara Singh v. CIT [1961] 41 ITR 685 (SC); CIT v. Madan Gopal Radhey Lal [1969] 73 ITR 652 (SC); CIT v. Associated Industrial Development Co. P. Ltd. [1971] 82 ITR 586 (SC); P. M. Mohammed Meerakhan v. CIT [1969] 73 ITR 735 (SC) and CIT v. N.S.S. Investments P. Ltd. [2005] 277 ITR 149 (Mad). It was in light of these decisions that CBDT Circular No. 4 of 2007 (see [2007] 291 ITR (St.) 384) was issued, indicating principles applicable in this regard. These criteria are: (1) intention of assessee at time of purchase of shares. This can be found out from treatment given to purchase in assessee's books of account. (2) Did assessee borrow money to purchase shares, and paid interest for it. Money is generally borrowed to purchase goods for purposes of trade and not for investing in asset for retaining. (3) Volume and frequency of purchases and sale/disposals. If purchase and sales are frequent, or there are substantial transactions in item, that can indicate trade. Habitual dealing in particular item is indicative of intention of trade. Likewise, ratio between purchases and sales and holdings may show whether assessee is trading or investing (high transactions and low holdings indicate trade whereas low transactions and high holdings indicate investment). Another related factor is duration for which shares are held. (4) Was purchase and sale made for realising profit, or for retention and appreciation in its value. former indicates purchases being part of trade; and latter is indicative of purchases being investment. Furthermore, it would be relevant to ask whether intention behind purchase was to enjoy dividend, or merely to earn profit on sale of shares. Importantly, commercial motive is essential ingredient of trade in this context. (5) Whether items in question were valued at cost. If so, it would indicate that they were investments. Where they were valued at cost or market value or net realisable value, whichever is less, it will indicate that items were treated as stock-in-trade. (6) Finally, it would be relevant to consider how assessee is authorised in its memorandum/articles. In present case, there is no dispute that opening investment cost for relevant assessment year 2006-07 was Rs. 2.60 crores; corresponding closing value was Rs. 4.70 crores. Furthermore, court notices that assessee derived, in addition to short-term capital gains, dividend income to tune of nearly Rs. 10 lakhs. authorities have all emphasised that even while seeing cumulative effect of tests, in given facts of case, one test might be determinative or conclusive. At same time, no single test having regard to facts of case and cumulative effect thereof, need be determinative or conclusive. In present instance, what is apparent is that assessee, individual, did not borrow any funds; share scrips traded were only from amongst what were held by him. Significantly, dividend income amounting to about 4 per cent. of value of investment was earned by assessee. What appears to have weighed almost conclusively with tax authorities in first and second instance is value and frequency of transactions. As underlined by us, that factor alone cannot be conclusive and would have to be weighed along with totality of facts. important detail which cannot be overlooked by court is that in all past periods and even subsequent periods, similar income reported by assessee was accepted by Revenue as short-term capital gain. In fact for assessment year 200506, scrutiny assessment under section 143(3) accepted sum of Rs. 1.02 crores as short-term capital gains. In circumstances, it was all more necessary for Revenue to point to some unique feature or distinctive material to differentiate assessee's activities for subject assessment year since they fundamentally remained same and unchanged. On appropriate application of authorities, this court is of opinion that Income-tax Appellate Tribunal's findings and view cannot be faulted in circumstances of case. question of law is, therefore, answered in favour of assessee and against Revenue. appeal is accordingly rejected. *** Commissioner of Income-tax v. Amit Jain