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2016 (8) TMI 1034 - ITAT HYDERABADProfits from sale of shares - capital gains OR business income - qualification for deduction u/s 111A - Held that:- The assessee has indulged in purchase & sale of shares, no doubt with the intention of making profit but intention and timing of holding of investments determines the nature of transactions. It is worth to note that assessee also entered into ‘F&O’ transactions, which clearly demonstrates that the intention was to make quick money/profit. The frequency of transactions are such that the minimal holding was 1 day and maximum was 77 days. This also demonstrates that the intention of the assessee was not for making investment but rather making quick profit, which is nothing but indulging in business. There is no doubt that all the transactions are conducted with the profit intention only. But, the intention to invest for holding as investment will qualify for deduction u/s 111A whereas the intention is to make quick profit, will definitely gives the impression that it was carried on as short term business to make quick money. As held in the case of CIT Vs. Rewa Shankar A. Kothari [2006 (1) TMI 80 - GUJARAT High Court] where on finding that there was a long gap between date of acquisition of shares and their sales, also shares having been shown as investments in Wealth Tax returns right from its purchase, it was held that profits from sale of shares were required to be taxed under capital gains and not as business income. In the present case, it is quite opposite to the above discussion. Hence, we are inclined to conclude that the transactions are in the nature of business and not as investment. Accordingly, we hold that the action of the AO in this case is appropriate and the appeal of the assessee is dismissed.
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