Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (4) TMI 534 - HC - Income TaxAssessability of Income from sale of Mutual funds – Mutual funds are not tradable – Whether the ITAT was legally justified in holding that the income on sale of Tata Mutual Funds (dividend plan) are assessable as income from Short Term Capital Gain – Held that:- The assessee is not a business entity in the nature of a manufacturing unit or marketing concern which, making departure from its normal business or marketing activities, had acquired a 'capital asset' as distinguished from 'business asset' - making investment to raise a 'capital asset' would definitely be not in the nature of stock-in-trade and such transaction would also not be a venture in the nature of trade - the assessee is engaged in the trade of sale and purchase of equity shares, securities and debentures etc. - The transaction is no different from the others entered into by the assessee in the regular course of its business and in the usual discharge of its functions by its employees - by no means the deposit can be taken to be distinct or different from other transactions carried out by the assessee - The deposit was clearly made by the assessee to earn profits on its deposit and thus, was in the nature of stock-intrade and the revenue generated to the extent of Rs.1,24,70,700/- is to be assessed as business income. The CIT(A) as also the ITAT were wrong in adjudicating the income on sale of Tata Mutual Funds (Dividend Plan) as income from 'short term capital gains' merely on the ground that the units of mutual funds were not freely tradable and thus, such investment was in non-tradable commodity - it has been amply proved that the business of the assessee is to make profits by virtue of investments in shares and securities etc. - Merely because there is single transaction or that such investment was in not freely tradable commodity, does not change the profit intent of the assessee who is in the business of investments only - the investment made by the assessee was rightly treated as stock-in- trade and revenue generated was correctly assessed as business income by the AO – Decided in favour of Assessee.
|