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2013 (1) TMI 11 - AT - Income TaxIncome on sale of shares - Capital gain vs. business income - assessees contented that it always treated the shares as investment, and there is no business activity carried on by the assessees with reference to shares - Held that:- While deciding whether the sale of shares is income from business or income from capital gain, one has to go by the criteria as held in the case of PVS Raju v. Addl. CIT [2011 (7) TMI 818 - ANDHRA PRADESH HIGH COURT] that the character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case. The frequency of buying and selling of shares, period of holding, quantum of turnover on account of frequency of transactions, intention of the assessee, No. of scrips shares held for fewer days or engaging in dealing in the same scrips frequently, indulgement in multiple transactions,Repeated transactions, coupled with the subsequent conduct of the assessee to re-enter the same scrip. Mere classification of these share transactions as investment in the assessee's books of accounts was not conclusive need to be looked. Thus on perusal of the statements incorporated by the AO in the assessment order it is found that the assessees have made several transactions of purchase of shares during the relevant year under consideration, and if there high volume, frequency and regularity of the activity carried on by the assessees in a systematic manner, it would partake the character of business activities carried on by the assessee in shares, and it cannot be said that the assessees have merely made investments in shares. The findings of the CIT(A) cannot be sustained in the eyes of law, as he has not considered relevant facts to decide the issue. Thus reverse the order of the CIT(A) and restore the order of the AO - in favour of revenue.
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