Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 105 - AT - Income TaxCharacterisation of profit/surplus - Gain on sale of shares - STCG or business income - shares converted as the stock-in-trade - HELD THAT:- If the income/surplus arising from the sale of shares (forming part of a lot purchased by the assessee) had undisputedly been subjected to tax as STCG, then, by way of an implication it can safely be inferred that the said entire lot of shares was purchased by the assessee with an intention to hold the same as a capital asset. Accordingly, backed by the aforesaid fact the income/surplus arising on the sale of the balance shares (forming part of the aforesaid lot) shall have to be given a similar treatment. However, in case the assessee is found to have converted or treated such shares as the stock-in-trade of the business carried on by him, then, the income/surplus arising on the sale of such shares shall be assessed in the manner provided in the provisions of sub-section (2) of Sec. 45 of the Act. Accordingly, in terms of our aforesaid observations, we herein modify the view taken by the CIT(A) and direct the A.O to give effect to our aforesaid observations and re-determine the re-characterization of the income/surplus arising on the sale of shares under consideration. Effect of CBDT Circular No. 6/2016, dated 29.02.2016 - where an assessee irrespective of the period of holding opts to treat the listed shares and securities as stock-in-trade, then, the income arising from the transfer of such shares/securities would be treated as his business income. Also, the same further contemplate that in respect of shares and securities held by an assessee for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as capital gain, the same shall not be put to dispute by the A.O. In fact, the CBDT in its aforesaid circular had observed that in all other cases, the nature of transaction (i.e whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the circulars issued by the CBDT., viz. Instruction No. 1827, dated August 31, 1989 and Circular No. 4 of 2007, dated June 15, 2007. We, thus, are of the considered view that the aforesaid Circular No. 6/2016, dated 29.02.2016 relied upon by the assessee would be of no avail in the backdrop of the facts involved in his case before us.Appeal filed by the assessee is partly allowed for statistical purposes
|