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2021 (2) TMI 274 - AT - Income TaxCharacterization of income - whether gains arising on sale of certain quantity of shares of a company, namely, Pyramid Siamira Theatre Ltd. (PSTL) by the assessee in the relevant assessment order is required to be taxed under the head 'capital gains' as offered by the assessee or is to be treated as 'business income' of the assessee? - HELD THAT:- The cumulative effect of all factors need to be weighed and a mere involvement of borrowed funds in some instances would not per se denude the transactions of its character of capital assets. The issue is essentially factual and depends of peculiar facts of each case. In the absence of any straight jacket formula available despite plethora of judgments, the lack of regularity and isolated instances of capital transactions would vindicate the stand of assessee that income/loss from seven transactions have been rightly regarded as capital gains. Assessee has taken delivery of shares before sale. While maintenance of capital and trading transactions as a separate category in books can be insisted upon in practice to ascertain the underlying intentions, the maintenance of separate D-mat account separately is not necessarily in conformity with usage of share trade and thus cannot be insisted upon. We thus find merit in the plea of assessee. Consequent claim of assessee deserves to be allowed on merits.
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