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2011 (8) TMI 468 - AT - Income TaxCapital gain or Income from business - Sale of share/securities - The assessee had shown long-term capital gain of ₹ 1,25,336 after claiming exemption under section 10(38) of the Act and short-term capital gain at ₹ 24,00,367 on account of sale of share/securities - The Assessing Officer has treated such gain as assessable under the head 'Income from business' and not as 'Capital gains' - the assessee is not having singular activity of investment in shares - In fact, the assessee has been holding shares as investment from year to year - It is also an emerging factor that investments have been made out of surplus/own funds and the assessee is otherwise engaged in other business activities - Before the lower authorities the assessee also canvassed with reference to his Balance sheet that he had substantial funds and it is only to realize better return, the investments in shares have been made - It is pointed out that primarily the assessee has held the shares for more than one year so as to earn long-term capital gains; that merely because certain shares were sold for a period less than one year, the same would be indicative of a business transaction is not correct - Having considered the manner in which the assessee has transacted in shares and having invested only the surplus funds in the transaction of shares, the same has been rightly declared by the assessee as falling under the head as 'Capital gain' and not as 'Business income' - Therefore reverse the order of the Commissioner of Income-tax (Appeals) and direct the Assessing Officer to treat the impugned income from sale of shares as assessable under the head 'Capital gains' and not as 'Business income'.
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