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2016 (9) TMI 818 - HC - Income TaxShares dealings - treated as investment in shares or business transaction - Held that:- We are inclined to think that neither the assessing officer nor the CIT (Appeals) insisted upon the assessee to produce evidence from its records to show that the transactions were intended to be investments and not mere dealing in shares. The substance of the matter was not thus adverted to. Stress was laid on the treatment given in earlier years which is not of much importance because a wrong view taken in the earlier years is not binding on the revenue in the subsequent years. Mr.Khaitan, learned Senior Advocate appearing for the assessee submitted that there is evidence to show that shares were held for a period between 18 and 39 months. We are unable to find any evidence in that regard except that the shares of McDowell and Macmillan were according to him held for the period between 18 and 39 months. It is nobody’s case that the gains being subject matter of discussion arose out of sale of those shares. On the contrary, the case of the assessee himself is that “the transactions this year are mere change of investment portfolios from bad performing sectors to good performing sectors.” Bad performing shares could not have yielded profit to the assessee as rightly pointed out by the assessing officer. For the aforesaid reasons we are inclined to think that the matter should go back to the assessing officer. The questions quoted above need not be answered at this stage because we have directed remand of the matter. Therefore, orders passed by the learned Tribunal, CIT (A) and the assessing officer are all set aside. The matter is remanded for reconsideration after giving an opportunity of hearing to the assessee in accordance with law.
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