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2022 (8) TMI 346 - AT - Income TaxCorrect head of income - Gain on sale of shares - nature of purchase of shares either as “investment” or “stock-in-trade” - STCG v/s business income - period of holding of shares - assessee is maintaining its shareholding in two separate portfolios namely one as “investment” and another as “stock-in-trade” - HELD THAT:- It is clear from Clause 3(b) of the CBDT Circular No. 6 of 2016 dated 29.02.2016 made it clear in respect of listed shares and securities held 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 Assessing Officer. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years. As it can be seen from the assessment order, the assessee is consistently taking the same stand of that the shares held as “investment” is offered for capital gains or loss. AO has not given any clear cut finding that the shares held as “stock-in-trade” were sold by the assessee and claiming capital gain. When this basic foundation is not being doubted by the AO - The action of the A.O. treating the sale of shares held as “investment” by the assessee and offered the same for short term capital gain cannot be treated as business income. For the only reason that the assessee is not carrying out any business activity during this assessment year except the sale of shares. Thus we hold that the sale of SIL shares held by the assessee as investment is to be treated only as short term capital gain and not as business income and thus we allow the grounds of appeal of assessee.
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