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2013 (5) TMI 552 - AT - Income TaxIncome from share transaction - capital gains v/s income from business - Assessee, an individual is a trader in yarn and dealing in Securities - Held that:- The facts of the case are that assessee has shown the Capital Gains from the sale of shares in his return of income. While passing the order, AO has not discussed the reasons as why the income returned under the head 'Capital Gain' should be treated as 'Business Income'. He has not taken into consideration the criteria laid down by the CBDT. Not a single instance has been quoted by the AO about the frequency of shares, holding period of shares, entries in the Books of Accounts and other relevant factors. FAA has dealt issue at length and has deliberated upon all the relevant facts which are decisive for settling the issue. Shares can be held as trader and as an investor also. Similarly, Profit/loss arising from share activities can be assessed under the head 'Business Income' or 'Income from Other Sources'. CBDT vide its Circular No. 4/2007 has indicated a few parameters to be investigated before deciding the issue. Now, it is universally accepted that a single parameter cannot decide the nature of the shares sold and resultant sale proceeds. FAA has dealt in details about the STCG transactions as well as LTCG & has analysed the period of holding and intention of the assessee. He has also taken into consideration that no borrowed funds were utilised by the assessee for making investment in shares & had reached to a logical conclusion that transactions carried out by the assessee were not in the nature of business activity. In favour of assessee.
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