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2012 (4) TMI 637 - HC - Income TaxGain on sale of shares - LTCG or business income - ITAT accepted STCG on sale of shares - Held that:- The reply given by the assessee was clear and categorical that the five shares had been purchased in the last financial year and the average period of holding in the shares in question was more than four months. There were 12 shares and the transactions were not frequent. The purchases were out of surplus funds. Their main business was not trading in shares but was an occasional independent activity. The assessee had also pointed out that the short- term transactions were the result of either a mistake, or wrong information. The reasons given by the Assessing Officer noted in paragraph 5 above do not justify the plea of the Revenue that the share sold was stock-in-trade. The assessee was not maintaining a separate heads in the books of accounts for shares held as stock in trade or investment, as the shares were held and treated as investment. Further, the number of transactions, 19 in all in one year cannot be considered as continuous and regular. The provision for diminution in value was as per the Accounting Standard 13 regarding Accounting of Investments. The Assessing officer ignored several other aspects and questions which have been raised and noticed and form the basis of finding recorded by the Tribunal. The order by the Tribunal therefore does not require any interference.
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