Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (9) TMI 1313 - AT - Income TaxCorrect head of income - profit arising from sale of shares - LTCG/STCG or Business income - intention of the assessee - HELD THAT:- CBDT Circular No. 6/2016 instructing the Assessing Officers and in the concluding para, the Board has reiterated that the principles have been formulated with the sole objective of reducing litigation and maintaining consistency in approach on the issue of treatment of income derived from transfer of shares. The intention of the assessee is paramount. If the assessee has decided to hold the shares as investment and the conduct of the assessee is in line with his intention, then the profits arising from sale of such investment shall be taxed as capital gains, long term or short term. Even the Board has recognized the fact that a taxpayer may have dual portfolio – one – as investment in shares and the other, as stock in trade of shares. Resolution of the Board of Directors mentioned elsewhere squarely lays down the intention of the assessee that since the holding in shares were of several years, therefore, the same should be held as investment. The intention of the assessee can also be gathered from the Balance sheet and Financial Statement of Accounts. Shares held by the assessee as investment are chargeable to tax under the head “Capital Gains” and shares held by the assessee as stock in trade are chargeable to tax as “Business Income”. Based upon the CBDT Circular, when the ld. CIT(A) accepted the long term capital gain, then we fail to understand why the ld. CIT(A) hesitated in not accepting the short term capital gain on the same set of facts. On a specific query from the Bench, in respect of the stand taken in subsequent years, the ld. counsel for the assessee pointed out that profits on sale of shares in subsequent years have been accepted as capital gains. This is also in line with the aforementioned CBDT Circular. As relying on SUKARMA FINANCE LIMITED [2015 (5) TMI 225 - DELHI HIGH COURT] and M/S EXPRESS SECURITIES PVT. LTD. [2013 (10) TMI 1182 - DELHI HIGH COURT] gains arising out of sale of shares should be taxed as LTCGs and STCGs as declared by the assessee. Accordingly, the appeal of the assessee is allowed and that of the Revenue is dismissed.
|