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2016 (10) TMI 194 - ITAT PUNETransaction of shares - whether the impugned transactions of purchase of shares and sale thereof tantamounts to an investment activity or a trading activity? - Held that:- The CBDT Circular No.6/2016 dated 29.02.2016 clarifies that once a particular stands has been taken by the assessee to such purchases in a particular assessment year it shall remain applicable in subsequent assessment years also and the taxpayers shall not be allowed to adopt divergent stand in different assessment years. Clearly, the CBDT Circular (supra) attempts to tone down the ongoing controversy on the issue in favour of the assessee. We find on fact that the action of the assessee is consistent with the aforesaid CBDT Circular. Consequently, gains arising on sale is required to be taxed under the head ‘capital gains’ only. We also take note of the averments made on behalf of the assessee that several purchases made in the earlier year and declared as ‘capital investment’ in the Balance Sheet of the earlier year were also sold and gain arising therefrom formed part of the impugned capital gains arising in this year. We, thus, find no reason to impugne the declared intention of the assessee that the share were acquired as capital asset. In the aforesaid view of the matter, we find considerable merit in the arguments raised on behalf of the assessee. Hence, in our view, the assessee is entitled to treat the gains arising on purchase and sale of shares in the impugned assessment year as short term capital gains as claimed. Accordingly, the action of the Revenue on the issue requires to be reversed. - Decided in favour of assessee.
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