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2020 (2) TMI 312 - AT - Income TaxTreatment of assessee as trust or AOP - whether profit on sale of shares should be treated as long term capital gains or business income ? - HELD THAT:- Settler, trustee and beneficiary are three separate and distinct entities. Hence, we hold that the assessee should be assessed in the capacity of trust only. We also find that the settler i.e Infrastructure Leasing and Financial Services Ltd. and beneficiary i.e. IL & FS Financial Services Ltd. are two separate and distinct entities in the present case. We find that the observations of taxability of trust and income being offered to tax in the hands of the beneficiary are all inter-dependent based on the outcome of the status of the assessee which we have already held to be taxed only in the status of trust and not as AOP. There is no dispute with regard to the fact that the long term capital gain of subject mentioned shares of ₹ 27,38,484/-has been duly offered to tax in the hands of the beneficiary i.e. IL & FS Financial Services Ltd., and the same has been assessed accordingly by the Income Tax department u/s.143(3) of the Act vide order dated 12/03/2013. Similarly, the interest income of ₹ 8,630/- was also duly offered to tax in the hands of the beneficiary and assessed as such. Hence, both these incomes cannot be taxed in the hands of the assessee. Taxable of income on sale of investments as long term capital gains / business income - we find that the same had been elaborately dealt hereinabove by the ld. CIT(A) as held appellant trust has got contribution only from one institution namely "IL&FS Financial Services Ltd." as Class P Beneficiary, and also there is only one transaction of sale of shares of Multi Commodity Exchange. In my opinion, such investment in a single company held for long term cannot be assessed as business income, hence the treatment of such income as LTCG is accepted - thus it does not require any interference.
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