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2013 (10) TMI 761 - ITAT MUMBAIClassification of head of income – On sale of shares and securities, whether the income accrue as ‘Long term capital gain’, ‘short term capital gains’ or as ‘business income’ - The assessee is a private family trust - The Assessing Officer found enormous volume, periodicity, frequency and multiplicity of transactions of purchase and sale in shares and securities – Held that:- For the method of valuation of stock of shares reflected in the balance sheet, the admitted position is that the assessee has not adopted the method of valuation as being generally adopted by a business concern. A business asset is valued at the cost or market price whichever is less but in the assessee's case, it is not so. The assessee has not adopted the prevalent method rather the investments have been shown at cost price only - The most important factor which has been ignored by the lower authorities is that there are no borrowed funds. The entire investments have come out of the corpus fund of the assessee – Therefore, to say that assessee is carrying on business activities in the guise of share investment does not hold any water - Considering the nature of transaction through Portfolio Management Services providers, the transactions have resulted into capital gains, STCG and LTCG as returned by the assessee – Decided in favor of Assessee.
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