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2013 (11) TMI 1660 - AT - Income TaxNature of income - business income or capital gain - Held that:- As in the PMS there was no assured guarantee against the loss or degeneration of capital, as per the SEBI guidelines the portfolio manager was authorised to purchase and sale of shares on behalf of the client against the securities after obtaining the written permission, that the portfolio managers were not authorised to undertake purchase/sale of securities that were settled otherwise then by actual delivery of transfer of securities, that they could make investment at their own discretion, that the investment made by the assessee through PMS was meant for maximisation of wealth and not with a view to purchase/sale of shares, that department had not disputed the fact that portfolio managers had the sale and absolute discretion to make investment for and on behalf of the assessee, that assessee had no role to play with regard to making of investment,that the very nature of PMS was that the investment made by the assessee could not be said to be scheme of trading of shares and stock, that the profit was to be assessed under the head Capital Gains. Considering the above, we are of the opinion that FAA was not justified in holding that share transactions carried out by the assessee through PMS was taxable under the head Business.
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