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2010 (1) TMI 942 - AT - Income TaxBusiness income vs Capital Gain - income from sale of shares - Held that:- The shares which are sold out of such investment this year were mostly purchased a year or earlier showing that the assessee had intention while purchasing them to hold them and they were reflected in that balance-sheet as investment. The assessee has enjoyed dividend income and declared the same in the return of income trading the transactions as investment, even if frequency of selling of shares may be more but in respect of shares held for a considerable longer period (for more than 366 days) as per finding given by the CIT(Appeals). This finding remained uncontroverted. The assessee has earned gain of ₹ 37,52,281/-, on sale of those shares which were held for more than 366 days and upto 6832 days. In any case, when those shares were purchased it could not be said that intention of the assessee was to deal in them and not to hold them as investment. Even in the case of investment it is for the assessee to decide when to dispose them off so that to give maximum return out of them. There is no theory that asset held on long-term basis should be sold only at the time of need or in emergency. Thus if in the past, the Department has accepted the sale of shares of holdings of more than a year as investment and profits thereon has been assessed under the head "capital gain", then there is no reason to hold differently this year & should be assessed as 'long-term capital gain'. Regarding profit of ₹ 55,40,679/- being 'short-term capital gain' - Held that:- As assessee is neither fully acting as a trader nor as fully investor - Where shares are held for more than a month, they should be treated as investment and on their sale short term capital gain should be charged. When shares are held for less than a month, gain on them should be treated as profit from business - Assessee is directed to give the working on above basis. Thus assessee will give the working and computing 'short-term capital gains' on the above basis.
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