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2014 (1) TMI 1441 - AT - Income TaxActivity of share trading - Income from business or income from capital gains - Held that:- Whether the assessee has earned capital gain or business profits on the shares sold by him depend on the facts and circumstances of each case - The intention of the assessee while purchasing the shares, as to whether the same was acquired for holding as investment or for doing business shall be considered - The treatment given by the assessee in its books of account is also one of the decisive factors to find out whether the shares were held as investment or stock in trade - If the shares are bought with the intention of earning capital gains thereon and also dividend income by keeping the same as investment, the gain arising there from is required to be treated as capital gains - If the shares are purchased with the intention to earn profit thereon and the same is treated as stock in trade in the books of account, the profit arising out of sale of such shares are liable to be treated as business income - The assessee made investment in shares with intention to earn dividend income on appreciation of price of shares - The assessee has been investing in shares since last 5-6 years and have been treating them as investment in its books of accounts - Following the Rule of consistency the income from shares shall be treated as capital gains and not business income - Decision in Commissioner of Income-Tax Versus NSS. Investments P. Ltd. [2005 (4) TMI 45 - MADRAS High Court] followed - Decided against Revenue.
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