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TMI Blog2012 (5) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the gains/income from sale and purchase of securities was assessable under the head "capital gains" and not under the head "income from business"? 2. The aforesaid question is common for all the three assessment years. 3. For the assessment year 1999-2000, the Revenue has raised another issue pertaining to deduction under Section 14A of the Income Tax Act, 1961 (Act, for short). Accordingly, for the appeal, which pertains the assessment year 1999-2000 being ITA 762/2009, we frame the following additional question of law:- "Whether the Income Tax Appellate Tribunal was right in affirming the order of the Commissioner of Income Tax (Appeals) deleting disallowance of Rs.1,90,385/- made by the Assessing Officer und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined by the tribunal. 5. The first and the main question, which is common in all the appeals, arises as the assessee in the income-tax returns had claimed and treated the loss/gains from sale and purchase of securities as taxable under the head "capital gains" and not under the head "income from business". The Assessing Officer in the assessment order rejected the claim and explanation given by the assessee as untenable on the ground that in the earlier years the assessee had treated income/loss from sale of securities as business income and had been assessed as such. He observed that the assessee cannot be allowed to change the head under which the transactions were taxable at his own sweet will. 6. The aforesaid findings recorded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the securities have been shown as investment in the balance sheet. Considering the entirety of facts, we are of the opinion that Ld. CIT (A) is right in holding that the income/loss arisen to assessee from sale and purchase of security was income/loss from long term capital gain/loss. Thus, we uphold his findings and ground No.1 is dismissed." 8. For the assessment year 2001-02, vide order dated 5thJune, 2009, the tribunal followed its order dated 4th April, 2008. 9. A perusal of the reasoning given by the tribunal in the order dated 4th April, 2008, reveals that there was dispute between the respondent-assessee and the Revenue with regard to the earlier treatment given by the assessee. We have already noticed that the Assessing Officer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the inception, appears to be impressed with the character of a commercial transaction entered into with a view to earn profit, it would furnish a valuable guideline. (b) The second test that is often applied is as to why and how and for what purpose the sale was effected subsequently. (c) The third test, which is frequently applied, is as to how the assessee dealt with the subject-matter of transaction during the time the asset was with the assessee. Has it been treated as stock-in-trade, or has it been shown in the books of account and balance sheet as an investment. This inquiry, though relevant, is not conclusive. (d) The fourth test is as to how the assessee himself has returned the income from such activities and how the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X
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