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2014 (4) TMI 972 - HC - Income TaxNature of income – STCG or business income – Trading in shares - Held that:- If the business activity of the assessee is trading in shares, there can be a presumption that the amount claimed was derived through trade, the assessee in such cases has to establish that the amount was indeed invested and the proceeds of sale were of a capital asset - keeping a separate investment account would also be a relevant indicia - the assessee had purchased the Unitech shares in the previous year; it had been shown as investment and that treatment was accepted by the income tax authorities - He had sold 2000 shares during the previous year - the gains were treated as short term capital gains. The left out shares were firstly sub-divided leading to five hold increase in the assessee’s holding - Unitech issued bonus shares which resulted in the assessee becoming owner of 1,95,000 shares - acquisition of shares cannot be considered as investment - in all there were a total of 47 share purchase and sale transactions and that the predominant or overwhelming gain was on account of sale of Unitech shares, the income derived cannot be called as business or share trading income; it is short term capital gain - There is nothing to show the frequency of trading, or volume of share transactions, or any other factor (use of borrowed funds, or the line of business of the assessee being share trading) pointing to the amount gained to be on account of share trading – Decided against Revenue.
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