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2011 (6) TMI 102 - AT - Income TaxSale and purchase of shares – CIT treated the income as business income on account of trading in shares as period of holding was not more than 30 days - as short term capital gain by applying the share holding period for short term capital gain as more than 30 days but less than 1 year. – The Assessing Officer held that the derivative transaction prior to 25-1-2006 are speculative in nature and from 25-1-2006 to 31-3-2006 are as business income. The Assessing Officer's view is based on the notification issued by the CBDT on recognizing stock exchange with effect from 25-1-2006 for carryout the derivative trading as per the provisions of section 43(5)(d). – CIT(A) uphold the order of AO - Held that: - income arising from purchase and sale of share held by the assessee as investment cannot be treated as business income - there is enough evidence to show that the assessee is an investor in shares and therefore the surplus arising on the sale of shares should be assessed as short term or long term capital gains, depending on the period of holding and not as business income.
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