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2010 (1) TMI 966 - AT - Income TaxGain arising from sale of shares - capital gain or business income - HELD THAT:- In view of the facts and circumstances, we hold that the capital gain offered on account of sale of investment was correct and the AO should have accepted the same. Accordingly, we direct the AO to consider the profit shown on account of sale of investment as short-term capital gains or long-term capital gains as the case may be. In the result the appeal filed by the assessee is allowed. During the year the assessee has stopped trading activity and whatever the stock was there, major portion of the same was sold during the year under consideration and the business profit was offered for taxation. In fact there was an opening stock of Rs. 2,69,87,538 and out of the same was sold at Rs. 1,80,98,024 and remaining stock of Rs. 88,89,514 was transferred to investment account. No sale whatever was effected on account of transfer to investment during the year under consideration sale of stock of Rs.1,80,98,024 has been offered as business income. The stock transferred to investment account was sold in the subsequent year. The details to this effect are placed at page 29 of the paper book. There is no ban to do both these activities together, i.e., trading in shares and investment in shares. There is a Board circular also in this regard. Therefore, not accepting the explanation of the assessee at the end of the AO or at the end of the CIT (A), in our considered view was not justified. We order accordingly.
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