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2015 (2) TMI 685 - AT - Income TaxTransaction of shares - Capital gain v/s business income - CIT(A) upheld the short term capital gain of ₹ 8,88,153/- as business income - Held that:- The assessee had explained regarding fund transfer between the two bank accounts. We do not find anything wrong if an assessee transfers his funds from business account to his personal account and from his personal accounts to his business accounts as the case may be unless assessee had borrowed funds but in the present case, it is not that the assessee was using borrowed funds. As regards the allegation of A.O. regarding holding period of shares, we find that this observation is also baseless as when assessee holds some shares for investment purposes and declares his intention of investment by classifying as investment then the income has to be assessed as capital gain either as long term capital gain or short term capital gain depending upon holding period of shares. Ld. CIT(A) on the one hand has arrived at the decision and has allowed part relief by treating a part of income as long term capital gain on the basis of holding period which exceeded one year. Therefore there is no justification in not allowing the balance part of same investment as short term capital gain on the basis that holding period was less than an year. The Ld. CIT(A) has distinguished the facts of present case with earlier years on irrelevant considerations as none of the circumstances as explained by Ld. CIT(A) can be applied to hold the capital gains earned by assessee as business income. The pledging of shares held for investment purposes cannot alter the nature of investment as in that case, even land mortgaged by a person to secure credit facilities from a bank will change the nature of land to business purposes from investment purposes. Similarly, use of funds from business accounts for personal purposes or vice versa cannot alter the nature of investment. - Decided in favour of assessee.
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