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2010 (9) TMI 492 - AT - Income TaxCapital gain vs. Business income - assessee is already engaged in full time business of manufacture and sale of jewellery in Thailand and has invested only the surplus money in the Indian share market - assessee is a NRI and as such not allowed to trade in shares in view of the RBI regulations - in the earlier years also share income was held be on account of capital gains - CIT(A) has correctly held that profits received by the assessee on account of sale and purchase of shares are to be treated as income from capital gains PE in India - merely if broker is advising the client regarding certain shares, then it cannot be said that such broker is also taking business decisions on behalf of the assessee. No fixed place or exclusive person was provided for assessee to conduct his business. . An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. - This shall not apply if such broker or agent carries on in that other State an activity descripted in paragraph 4 wholly or almost wholly for the enterprise itself or for the enterprise and other enterprises which are controlled by or have a controlling interest in it. Father of assesssee - assessee’s father was 76 years old and was a retired person. He has not acted on behalf of the assessee. This has not been rebutted by the department. If AO had any material he should have called Mr. Sevantilal S. Shah and examined him. But nothing like that has been done to prove that assessee’s father constituted PE. Occasionally he might have signed cheques and that itself would not construe him as PE of the assessee. - Decided in favor of assessee.
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