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2016 (7) TMI 1492 - AT - Income TaxTreatment of profit arising out of the sale of shares - correct head of income - short term capital gains or business income - Held that:- The intention of the assessee at the time of the purchase of shares is paramount. If the assessee has clear intention of being an investor and showing the shares as investment, we do not find any reason to disturb the intention of the assessee. The assessee under consideration is investor and, therefore, any gain arising out the transfer of shares should be treated as capital gains be it short term or long term. Addition made u/s. 68 on account of unexplained cash credit - Held that:- We find that the assessee has successfully discharged the onus cast upon him by virtue of Section 68 of the Act. Documentary evidences on record show that the identity of the creditor, genuineness of the transaction and the capacity of the lender have been successfully established by the assessee. The First Appellate Authority have thoroughly examined the evidences on record and the ld. D.R. could not point out any fallacy/flaw/error in the findings of the First Appellate authority, therefore, no interference is called for. Surplus on sale of shares of IDFC - Held that:- There is nothing on record brought by the revenue authorities which could suggest that the assessee was actually trading in the shares of IDFC. There is no evidence with the Revenue to establish the nexus. There is no evidence on record which can demonstrate that the assessee has colluded with Smt. Rupal Naresh Panchal in a manner that would indicate that shares were acquired for the purpose of trade. Such nexus has not been established. The observations of the revenue authorities are only inferential without any concrete material in the possession of the A.O. The activity of the assessee by virtue of mode of acquisition of shares cannot be segregated into two parts. The First Appellate Authority has erred in creating an artificial distinction only on the basis of mode of acquisition - no hesitation in setting aside the findings of the ld. CIT(A) and directing the A.O. to tax the surplus on sale of shares of IDFC under the head short term capital gains. - Assessee appeal allowed.
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