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2016 (2) TMI 623 - AT - Income TaxSale of investments - Short term capital gain V/S business income - Held that:- As per Section 45(1) of the Act, any gain arising on transfer of a capital asset is to be taxed as capital gain. Further section 2(14) define capital asset to mean property of any kind held by an assessee whether or not earmarked for his business or profession, but does not include any stock in trade, consumable stores or raw material held for the purpose of business. Thus the gain arising on capital asset falling within the meaning as defined in Section 2(14) is to be charged as capital gain. In the present case as is evident from the facts on record, the investments in shares were held as capital asset. The assessee has accounted for these investments in shares as capital asset in its books of accounts. The same has also been declared in the financial statements as capital asset. These financial statements have been audited and also have been approved by the shareholders filed with the Registrar of Companies. The books of accounts and the audited financial statements have evidentially value and what is recorded therein cannot be disturbed lightly. The income arising on sale of capital asset, as stated hereinabove, has to be assessed under section 45(1) as capital gain and accordingly the CIT(A) was right in holding that gain arising on sale of investment will be chargeable as capital gain and not as business income.
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