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2012 (8) TMI 396 - AT - Income TaxCapital gain vs Business income - dispute regarding nature of income from sale and purchase of shares - assessee alleged of involved in scam of getting allotment of shares reserved for small investors by making multiple applications in ficticious /benami names - Held that:- It is found that assessee was financing such activities. Shares allotted were transferred by Smt. Roopal N. Panchal and M/s. Sugandh Estate and Investments P. Ltd.(in whose case search was conducted revealing involvement of assessee in scam) to the assessee and other financiers who sold shares in the market on the day of listing or immediately thereafter for making profits. It is therefore clear that the assessee had acquired shares in public issues from borrowed funds through an organized effort almost at allotment price, through irregular and illegal manner and selling them on profit soon after shares were listed on stock exchange. The income from share transactions has, therefore, been rightly assessed as business income, however, Security Transaction tax (STT) has to be allowed as a deduction - Decided against assessee.
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