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2016 (7) TMI 6 - AT - Income TaxAssessability of gain on purchase and sale of shares - business income or capital gain - Held that:- In the present case, it is an established position that assessee company is an investment company primarily involved in undertaking transactions in the shares of Piramal Group of companies. This feature contrasts it from an investment company, who otherwise freely operates in the market place looking for opportunities to trade in all or any available scrips in the market. Therefore, in such a situation, in our view, the onus is on the Revenue to establish that assessee has indeed undertaken trading in the shares, though the transaction have been confined to the scrips of Piramal Group of companies. Having regard to the facts and circumstances of the case, we are unable to uphold the stand of the Revenue that the purchase and sale of shares have been undertaken regularly so as to be treated as a business activity. Reference made by the CIT(Appeals) in assessment year 2001-02 to the factum of assessee not disputing the stand of Assessing Officer in assessment year 1999- 2000 is not determinative of the issue because ostensibly, the amount involved was very small and for that reason assessee did not prefer an appeal before the Tribunal, an assertion of the Ld. Representative for the assessee, which is not controverted by the Ld. Departmental Representative for the Revenue before us.Considering the entirety of facts and circumstances of the case, we hereby affirm the stand of the assessee and hold that the impugned income earned on sale and purchase of shares is liable to be assessed as capital gains, as claimed by the assessee.- Decided in favour of assessee Enhance the income on account of disallowance of interest cost - Held that:- Consequent to our decision to treat the gain on sale and purchase of shares as income assessable under the head capital gains, the interest costs incurred for investment in shares held as investment is liable to be added to the cost of acquisition of the shares for computing capital gains. In this view of the matter, the disallowance made by the CIT(Appeals) becomes untenable. - Decided in favour of assessee
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