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2014 (3) TMI 766 - AT - Income TaxAssessment of income under proper head – Sale of shares - Whether the income declared by the assessee under the head “Capital Gains” is to be assessed as such or as “Business Income” – Held that:- Prima facie, the CIT(A) did not examine the facts correctly in arriving at the conclusions – the CIT(A) order is based on certain wrong facts which are admittedly not correct, there is no option other than to reexamination - Purchase of shares during the year and selling them frequently in short period do indicate that the assessee has purchased the shares with a motive to earn profit in short period – all the facts indicate that the intention of the assessee is to gain profits by dealing in short term period only - the AO also discussed about borrowing of funds, small amount of dividend when compared to the gain in sales and also the fact that assessee group companies are involved in share trading – thus, the conclusion of the Revenue authorities that the income from sale of shares declared by the assessee during the year as short term gain is income from business activity is correct and calls for no interference. Relying upon PVS Raju and Others vs. Addl. CIT [2011 (7) TMI 818 - Andhra Pradesh High Court] – The character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case - Ultimately, it is a matter of first impression with the Court whether a particular transaction is in the nature of trade or not – the findings of the AO are approved that assessee has indulged in share trading during the year – thus, the order of the CIT(A) set aside – Decided in favour of Revenue.
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