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2013 (11) TMI 473 - AT - Income TaxClassification of head of income to be ‘Income under head Business & Profession’ or ‘Income under head Capital Gains’ on sale of shares – Principle of consistency - The assessee company is engaged in the business of investment and trading in shares and securities. It furnished its return of income for the Assessment Year under consideration by disclosing the total income of Rs. 20,60,73,429/- on 14.11.2006 - Revenue audit party has observed that the holding period in respect of 98% of the sale of shares is less than 12 months and therefore, raised an objection against the claim of STCG – Contended by Revenue profits that profit earned from the activity amounting to Rs. 20.60 crores should be brought to tax as ‘business income’ as against assessee’s claim of STCG – Held that:- Average holding period is calculated from all the transaction to be more than 60 days in respect of the sale and purchase of the transaction giving rise to the STCG which indicates that there is no difference in the nature of transaction for the year under consideration from that of the earlier year as well as subsequent year. Further, the transaction of purchase and sale giving rise to the LTCG have been accepted by the authorities below, even in the reopening of the assessment, the assessee is treating the same as investment by showing in the books of account; these are delivery based transactions; therefore, having accepted similar transaction in the earlier years as well as in the subsequent year the Assessing Officer cannot take a different view in the absence of distinguishing material factors - In view of principles of consistency, accepted the claim of the assessee as the transaction of purchase and sale of shares and securities in question as investment and arising out of the transaction is capital gain and not business income – Decided in favor of Assessee.
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