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PRINCIPAL COMMISSIONER OF INCOME TAX-1 Versus SHAH INVESTOR'S HOME LTD

2016 (6) TMI 598 - GUJARAT HIGH COURT

Transaction in shares - Short Term Capital Gains OR Business Income - Held that:- Referring to guidelines for ascertaining whether in case of certain assessee buying or selling of shares is done by way of investment. These tests have to be applied cumulatively. The Tribunal noted that the assessee had a history of being investor. The activity of transactions relied only to five strips. All transactions were delivery base. The assessee had not termed the activity of sale and purchase on daily bas .....

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HI AND MR. A.J. SHASTRI, JJ. FOR THE APPELLANT : MRS MAUNA M BHATT, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgment of Income Tax Appellate Tribunal ('the judgment' for short) dated 16.10.2015 raising following question for our consideration. Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in holding that transaction in shares made within a short period was Short Term Capital Gains and no .....

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g in case of CIT v. Reva Shankar A. Kothari, 201 CTR 510 (Guj) and in case of CIT v. Associated Industrial Development Company, 82 ITR 586 (SC) and noted various tests laid down through such judicial pronouncements for ascertaining whether the sale and purchase of shares could be treated as the business activity of an assessee or his investment. These tests were the acquisition for investment and not dealing in shares, sale of shares because it gives a good price, showing all shares as investmen .....

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alongwith the return and those supplied during the course of assessment. He also referred to the period of holding of certain shares. 3. The assessee carried the matter in appeal before the Commissioner who relied on the assessment proceedings of the previous years, allowed the appeal. The Revenue carried the matter in appeal before the Tribunal. Such appeal was however dismissed by the Tribunal making following observations: 7. We have heard the rival submissions and perused the material on rec .....

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ing that it is not a case where the Assessee has done the transactions of sale and purchase on every day basis. He has further noted that the shares were considered by the Assessee as investment in its books of accounts, had not borrowed any finance to acquire the shares and out of the total gains earned by the Assessee, around 2/3 of the profits were earned from shares which were held for over 60 days. He thereafter relying on the ratio of the decision rendered by the Hon'ble Bombay High Co .....

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