2010 (9) TMI 1136 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) directing assessment of income from sale of shares as Short term Capital Gains instead of business income for A.Y. 2006-07.

Comprehensive Details:

Issue 1: Classification of Income
The assessee, engaged in nonbanking finance activity, declared income from sale of securities as short term capital gain, which was disputed by the AO and assessed as business income. The CIT(A) accepted the claim based on a previous ITAT decision for A.Y. 2005-06. The revenue appealed against this order.

Issue 2: Judicial Precedent
The Tribunal considered the previous decision in the case of Janak S. Rangwala, where it was held that the nature of the transaction should be determined based on the entire transaction, not just the volume. The Tribunal found no reason to interfere with the CIT(A)'s decision, as the facts were similar to the previous year and no new material was presented by the revenue.

Conclusion:
The Tribunal dismissed the revenue's appeal, confirming the CIT(A)'s order to treat the income from sale of shares as Short term Capital Gains and not business income, based on judicial precedent and consistency with previous assessments.