TMI Blog2014 (4) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... t be categorized as Business - The units can be bought or redeemed with mutual fund itself - the Income Tax Act itself recognized units of mutual funds as a special category of ‘‘investments’‘ as far as trusts were concerned, u/s. 11 (5) which placed this in an entirely separate class - The assessee had kept the amounts separately in an investment account and the mutual funds for about two years, the Tribunal clearly fell into error in holding that the amount was business income and not long term capital gains – Decided in favour of Assessee. - ITA 1658/2010 - - - Dated:- 1-4-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. For the Petitioner : Mr. Kaanan Kapur with Mr. Bhushan Kapur, Advocates. For the Respondent : Ms. Suruchi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal holding that the profits from the sale of these mutual funds amounted to business income. Learned counsel highlights that apart from the fact that the mutual funds were held for almost two years, other indicators clearly showed that the transactions did not result in business income. It was submitted that the mutual funds units were not tradable and had to be redeemed from the issuing concern or the fund house. Furthermore, submitted learned counsel, that no borrowed funds had been used and right through the accounts kept in these mutual funds have been clearly demarcated as investments. The Tribunal s undue emphasis on the infrastructure was a wholly irrelevant factor. Learned counsel for the Revenue supported the findings of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It cannot be gifted or transferred in any other manner. vii. The key decision making authority rest with the fund manager of the respective mutual fund and assessee do not have any say as to when to buy, what to buy, when to sell and what to sell. viii. Assessee s case of transactions in Mutual Funds resulting in capital gains has already been held in its favour in AY 2004-05 in appeal no.112/2006-07 by my predecessor. ix. Most of the investments in mutual fund schemes have been held for a considerable time and as far as 27 months, thus frequency is restricted. This Court also notices that the CIT (A) noted in the order that the Income Tax Act itself recognized units of mutual funds as a special category of investments ..... X X X X Extracts X X X X X X X X Extracts X X X X
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