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2013 (9) TMI 473 - AT - Income TaxExemption u/s 10(38) - Assessee received Long Term Capital Gains - Whether the assessee’s share transactions are in ‘capital assets’, though of long term tenor, or of trading stock - Revenue assessed it as business income u/s. 28 - Held that:- It is only the assessee, therefore, who needs to establish the basis of his considering some shares, though purchased in the regular course of its business of share trading, as not for acquisition of trading stock, but only as capital assets. All the shares have been bought by the assessee in the regular course of his business, employing common funds, depositing them in the same D-Mat account, and even through the same broker and infrastructure. New shares are purchased deploying funds realized on the sale of such shares. To contend, therefore, of some such shares as being capital assets on the premise that the same are sold beyond one year of their purchase, is, therefore, clearly untenable. The categorization as to whether the scrip acquired is as an investment or as a part of the assessee’s trading stock is primarily one of intention with which the share is purchased/held and, accordingly, gets to be decided at the stage of or upon acquisition itself. That the scrip may eventually be sold, in whole or in part, within a period less than that envisaged earlier, or within a period less than a year, is, however, a different matter, as perceptions and, consequently, decisions, even qua capital acquisitions, may vary or change with time. This would, however, not make it any less an investment, where acquired as such in the first place, so that the gain or loss arising thus would be a short term capital gain or loss, as the case may be - Following decision of CIT vs. Sutlej Cotton Mills Supply Agency Limited [1975 (7) TMI 2 - SUPREME Court] - Decided against assessee.
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