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2014 (2) TMI 837 - AT - Income TaxConversion of stock in trade into capital asset - Computation of period of holding - AO held that trading in shares is not incidental activity but main business activity of the assessee – Held that:- It is the prerogative of the assessee to manage the affairs of his business - the assessee has to follow consistent method in accounting policies and treatment of his assets – Relying upon CIT Vs. N.S.S. Investments P. Ltd. [2005 (4) TMI 45 - MADRAS High Court ] - the profit on sale of shares held as investment is to be treated as capital gains instead of 'Business Income' and that the assessee can hold some shares as capital for the purpose of earning dividend and some shares as stock in trade for the purpose of doing business of buying and selling - when shares were sold by the assessee, they were converted into capital asset – the gain arising there from on sale would be assessable as capital gain - where the property-in-question is held by the assessee as stock in trade for the purpose of its business and the same had been converted by the assessee into investment, the period for which the said property was held as stock in trade cannot be reckoned for ascertaining as to whether it was a 'Long Term Capital Asset' or a 'Short Term Capital Asset' within the meaning given in Section 2(29A) and 2(42A) of the Act. The period for which the shares were held as stock in trade by the assessee is to be excluded from the total period for which the shares were held by the assessee - Since, the date of acquisition of shares is not forth coming from the records – the matter is remitted back to the AO for determination of total period of holding of shares as capital asset – Decided in favour fo Assessee.
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