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2015 (12) TMI 1368 - AT - Income TaxTransaction of shares - business income or Short Term Capital Gains eligible to concessional tax treatment u/s.111A - Held that:- The assessee has indulged in violation of SEBI Regulation while making investment in IPOs. However, whatever amounts the assessee had illegally earned, which could have been assessed as their income, has been taken away by SEBI from them. Once the actual amounts of income earned through the violation of SEBI Regulation have been disgorged by SEBI, ultimately no income has resulted to the assessee. Thus, applying the theory of real income and also relying upon the above decision of Shri Monal Y. Thakkar and Smt. Reetaben R. Thakkar [2015 (7) TMI 913 - ITAT AHMEDABAD ] we are of the opinion that the sum of ₹ 2,20,76,842/- is to be excluded from the assessee’s income. We order accordingly and hold that only the sum of ₹ 34,12,218/- is to be assessed in the hands of the assessee in the year under consideration. We express no opinion about the finding of the CIT(A) that the sum of ₹ 2,20,76,842/- is to be assessed as business income because since we have held that on account of disgorgement the sum of ₹ 2,20,76,842/- is not to be assessed in the hands of the assessee. Once the amount is not to be taxed because it has already been recovered by the SEBI and there is no real income in the hands of the assessee, the question of the head under which it is to be assessed could not arise. Now, we revert back to the question with regard to the head under which the sum of ₹ 34,12,218/- is to be assessed. The entire gain had arisen from the purchase and sales of one share, i.e., FCS share which was purchased once and was also sold once. Thus, there was a purchase and sale of single script at one time during the year under consideration – that too with assessee’s own fund. This statement of the ld. Counsel has not been controverted. In view of above, we do not find any justification to interfere with the finding of the CIT(A) in this regard upholding assessment of ₹ 2,20,76, 842 (out of Short Term Capital Gains of ₹ 2, 54, 93,060 shown in the appellant's return) as business income instead of as Short Term Capital Gains eligible to concessional tax treatment u/s.111A.
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