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2018 (5) TMI 1095 - GUJARAT HIGH COURTIncome on sale of shares of VEOL - to be treated as capital gain OR business income - Held that:- The materials on record would suggest that the shares in question were of one Vishal Exports Overseas Ltd. [“VEOL”] which was a limited company. The assessee had been strenuously arguing that it was not possible to rig the prices of the shares through small trading. CBDT circular in question lays down certain directives for limiting the disputes arising out of the issue at hand. In this context, in the said circular it is noted that despite earlier directions, disputes continued to exist on the application of the principles laid down in the said circulars and the individual tax buyers find it difficult to prove the intention in acquiring the shares and securities in question. There are no universal principles which could be applied uniformly. This exclusion clause would apply where the genuineness of transaction itself is questionable. In cases such as bogus claims of long term capital gain or short term capital loss or sham transactions, the instructions of CBDT would not apply. It is not even the case of the Revenue that the transactions in question were sham. The observations of the Assessing Officer and CIT (Appeals) about the rigging of the shares could be at best seem to be more of suspicion than establishing the necessary conclusions. Appellate Tribunal is right holding the income shown by the assessee on sale of shares of VEOL is to be treated as capital gain instead of business income - Decided against revenue
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