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2010 (12) TMI 93 - AT - Income TaxBusiness income versus short term capital gain - trading in shares - AO rejected the claim of assessee and decided that in respect of these shares assessee was only a trader and therefore, the short term capital gain declared by the assessee, was treated as business income - Held that: - Assessee has carried out only 31 purchase transactions and 25 sale transactions which cannot be said to be a great volume of transactions. Further, assessee was holding shares worth Rs. 11.56 crores at the end of the year and market value of the same was about Rs.17.69 crores. If assessee was a trader, he would have definitely realised this huge profit of almost Rs. 6 crores immediately and not carried out the stock to the next year. In the assessment year 2004-05 the assessee sold 30 scrips and earned capital gains of Rs.1.05 crores, which was accepted by the AO as short term capital gains under section 143(3) of the Act. Similarly in the assessment year 2007-08 also the capital gains of Rs.0.08 crores on sale of 24 scrips was treated as short term capital gains by the AO in the assessment completed under section 143(3) of the Act. The conduct of the AO attracts the rule of consistency. - Decided in favor of assessee.
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