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2015 (1) TMI 363 - AT - Income TaxNature or sale of shares – Capital gains or business income - Whether the short term gains from sale of shares should be treated as capital gains (as treated by the assessee) or a business gain – Held that:- FAA has not considered the fact that the assessee's investment was amounting to ₹ 55.64 lakhs, whereas the turnover in purchase and sale of shares was ₹ 31,72,15,256/- Such huge turnovers definitely gives an indication that the assessee has done trading in shares - the assessee was well equipped being an employee of a stock broking firm, having the entire infrastructure readily available for him, having knowledge, information and acumen for carrying on share trading - by no stretch of imagination an investor holding an investment of approximately ₹ 56 lakhs would have a trading volume of approximately ₹ 31 crores. The assessee has not filed any paper book, to come to a factual finding as to the number of transactions and the values, where the assessee has purchased and sold shares on the same day or within two or three days - FAA has not given any facts or figures to controvert this finding of the AO - merely because the assessee also is an investor in shares, it does not mean that he would not have done trading in shares this year - if the assessee had an intention of holding the shares as investment, then purchase and sale of shares in such volumes and at such high frequency is contradictory to such intention - Classification in the Balance Sheet is an indication but not a conclusive proof that the assessee is only an investor - The figures that are available does demonstrate that the assessee has traded in shares, in addition to him being an investor in shares - if a share is held for more than two or three months and then sold, the transaction cannot be properly classified as trading in shares - This segregation of profits between short term capital gain and business income requires a further analysis of the transactions – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of revenue.
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