Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (10) TMI 768 - AT - Income TaxClassification of head of Income – Income under the head Capital gain or as business income – Shares and securities held as Investment or as Stock in trade - As per the assessee's own admission, during the year he has dealt with 95 number of scrips of different companies. The Assessing Officer in the assessment order has mentioned specific instances where the assessee has sold shares either on the same day or within a very short period of 7 to 15 days. It is also a fact on record that the volume of turnover was because of the frequency and regularity of transactions and not due to huge investment – Held that:- Reliance has been placed upon the judgment in the case of PVS Raju [2011 (7) TMI 818 - Andhra Pradesh High Court] - Facts clearly show that the intention of the assessee in investing in shares is for the purpose of earning profit and not to earn dividend. It is also a fact on record that the dividend earned by the assessee during the relevant financial year is meager considering the quantum of turnover. If the intention of the assessee would have been to hold the shares as investment for the purpose of earning dividend, then the assessee would not have indulged in transactions of purchase and sale of shares in such frequency and regularity and in a systematic manner. This shows that the intention of the assessee is to earn profit. It is immaterial whether the assessee treats the shares as investments or stock in trade in its books of accounts. The assessee has not produced any material to prove that the finding of the Assessing Officer that the assessee has sold shares either on the same day or within very short period of purchase is not correct - activity of the assessee in purchase and sell of shares is in the nature of business and therefore the income derived from sale of shares has to be assessed as business income. The fact that the assessee has paid security transaction tax will not be determinative factor to hold that the income earned by the assessee is to be treated as short term capital gain – Decided in favor of Revenue.
|