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2016 (8) TMI 152 - GUJARAT HIGH COURTProfit on sales of shares - "capital gain" OR "business income" - Held that:- Assessing Officer without referring to the total transactions and the period for which shares in question were hold, made certain broad general observations. However, Commissioner of Income tax (Appeals) noted that the appellant had shown shares of ₹ 42,000/- of Oriental Bank of Commerce as investment since 01.06.1995 and shares of IPCL worth ₹ 3.26 lacs as investment since 31.03.2001. Share of Alliance Frontline Funds was shown as investment since 01.02.2003. The assessee company had share capital of ₹ 8.45 crores, reserve of ₹ 72.32 lacs. He was therefore of the opinion that looking to the balance sheet in the earlier years as investment and the period of holding of the shares and also that the assessee had invested its own funds and not used borrowed funds for purchase of shares, the sale of shares cannot be taxed as business income. We are in agreement with the view expressed by the Commissioner of Incometax (Appeals) and the Tribunal. Looking to the period for which the shares were held, the number of transactions, the fact that the shares were shown as investments in the books of the assessee since long and that the assessee had not utilized any funds borrowed from purchase of the share, the Assessing Officer committed error in treating the shares as the business income of the assessee. Decided in favour of assessee.
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