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2014 (8) TMI 273 - AT - Income TaxIncome from sale of shares – Income treated as business income OR STCG – Held that:- CIT(A) has given a categorical finding that the activities carried on by the assessee in respect of share transactions are akin to the business activities - The Statement of Profit/loss arising on sale of shares also shows that the assessee was indulging in short term trading activities during the year - shares allotted under primary issue were also sold within short period from the date of allotment - These kinds of transactions add strength to the view taken by the tax authorities - CIT(A) has pointed out the assessee has earned long term capital gains in 11 transactions and has earned short term capital gain in 255 transactions, which proves the case of the AO that the assessee has been indulging in short term trading activities with the aim of maximising the profit. The fact that the assessee has been indulging in speculative activities also, also support the case of the AO - the speculative transactions have been admitted as business transactions - Another important aspect that was brought out by the tax authorities is about the conduct of the assessee, viz., the assessee decides to take delivery of shares purchased by her only at the end of the day depending upon the price movement of those shares, which means that the decision to hold it as investment is not taken at the time of purchase, which is the crucial factor to determining about the nature of transactions - If the intention had been to hold it as investment, usually, an investor is least bothered about the short term price movements - The conduct of the assessee was brought out by the assessee, strongly militates against the stand taken by the assessee - CIT(A) has also pointed out that the assessee has rotated the funds several time, which is akin to the business activity - CIT(A) was justified in upholding the order of the AO in assessing the gain arising on sale of shares as the business income of the assessee – order of the CIT(A) is upheld – Decided against Assessee.
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