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2011 (11) TMI 481 - AT - Income TaxSale of shares of Pvt Ltd Company - Trading assets - Capital gain vs business income - Held that:- The treatment accorded to a transaction in the books of account, by itself, cannot be decisive of it's true nature. Therefore, nothing conclusive really turns on the fact that the shares in these two private limited companies were held as stock in trade in the books of account of the assessee. The shares were in private limited companies and could not have been, therefore, freely transferable. An asset which is freely transferable cannot be in the nature of stock in trade, unlike shares in listed companies which can be freely bought and sold in stock exchanges or even in off market transactions. Also the assessee has given an explanation for investment in these shares and no inconsistencies have been found in the said explanation. Thus the shares held by the assessee in Marine Container Services Pvt Ltd., and Bay Container Terminal Pvt. Ltd., were not trading assets and the CIT(A) was justified in holding that gain on sale of these shares are required to be treated as long term gains - Decided against the Revenue.
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