TMI Blog2014 (1) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... because the purchase was made with the intention of resale - A capital investment and resale do not lose their capital nature merely because the resale was foreseen and contemplated when the investment was made and the possibility of enhanced values motivated the investment - Decided against Revenue. - ITA No. 320 of 2010 - - - Dated:- 7-10-2013 - MR JASPAL SINGH, J. For the Appellant : Ms. Urvashi Dhugga, Advocate JUDGEMENT AJAY KUMAR MITTAL, J. 1. The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated 3.8.2009 passed by the Income Tax Appellate Tribunal, Chandigarh Bench A , Chandigarh (hereinafter referred to as the Tribunal ) in ITA No. 113/C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the surplus/ loss resulting to the assessee on sale of the shares was to be considered as a business income/loss since investment in shares amount to a business activity whereas the assessee had declared surplus/loss on the shares as capital gain/loss. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity, the CIT (A) ]. The CIT(A) vide order dated 28.11.2008 (Annexure A-2) partly allowed the appeal. Being dissatisfied with the order of the CIT(A), the revenue filed an appeal before the Tribunal, who vide order dated 3.8.2009 (Annexure A-3) upheld the order of the CIT(A) and dismissed the appeal holding that the sale of investments of shares by the assessee was exigible to tax und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order has also enumerated the mechanism by which the sale consideration is arrived at. It is provided that in case shares are not quoted the stock exchange, interest on the amount invested is included upto the date of disinvestment at 1% above the bank rate of interest. The interest so calculated is added to the principal amount to work out the sale consideration of the shares. In case of stock exchange quoted shares, sale consideration is calculated as per the interest method stated above or the value at which the shares are quoted in the stock exchange, whichever is higher. We are referring to the aforesaid terms conditions of the investment made by the assesse only to point out that it is not a case where a person is investing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration Ltd. (ITA No. 1333/Chandi/94 and ITA Nos. 944 1591/Chandi/95) decided on 22.11.1996 against which reference had been filed before this Court which was numbered as ITR No. 20 of 2000. Question No.2 at the instance of the revenue therein was as under:- 2. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that the investment in shares of companies jointly promoted by the Corporation along with other industrial undertakings, is in the nature of investment and not stock-in-trade and profit realised on disinvestment in these shares, is not business income but a capital gain? 6. This Court vide judgment dated 30.9.2010 held as under:- 11. In the present case, as has been fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case. Ultimately, it is a matter of first impression with Court whether a particular transaction is in the nature of trade or not it has been said that a single plunge may be enough provided it is shown to the satisfaction of the Court that the plunge is made in the waters of the trade; but mere purchase/sale of shares-if that is all that is involved in the plunge-may fall short of anything in the nature of trade. Whether it is in the nature of trade will depend on the facts and circumstances. XX XX XX XX 13. Where a purchase is made with the intention of resale, it depends upon the conduct of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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