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2016 (7) TMI 961 - GUJARAT HIGH COURT

2016 (7) TMI 961 - GUJARAT HIGH COURT - TMI - Sale of shares - Business income or capital gain - Held that:- It is not in dispute that in the previous years, the assessee was held to be an investor. Hence, in the facts of the present case, we are of the view that the assessee should be termed as an investor and therefore, the issue raised in this Appeal is answered in favour of the assessee - TAX APPEAL NO. 1168 of 2006 - Dated:- 12-7-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELL .....

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3.2007, the following substantial question of law was framed by the Court for consideration :- Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that all the shares sold by the assessee were held by him on business account and not on investment account? 3. The facts of the case are as under :- The appellant - assessee sold in the Assessment Year : 1993-1994, 600 TISCO shares which she had acquired in Financial Year : 1989-1990 and 1700 Essar Ship .....

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res on business account. The appellant preferred an appeal before CIT (Appeals), wherein it was pointed out that upto the Assessment Year : 1992-1993, both in Income Tax and Wealth Tax, the appellant has been held to be an investor. The CIT (Appeals) held that in the Wealth Tax, the appellant's investments in shares were held to be capital assets and there was no evidence of the appellant converting them into stock in trade nor had the appellant borrowed from the Bank to purchase the shares. .....

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is further submitted that the Tribunal failed to appreciate that in all the Assessment Years upto 1992-93, both in Income Tax and Wealth Tax, the assessee was held to be an investor and there is no justification for holding her to be a trader without seeing the facts of the year in which she purchased the shares, sold in the Assessment Year : 1993-1994 and instead seeing the facts of the Assessment Year : 1993-1994, which also did not justify the finding of a trader. It is further submitted that .....

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e said findings reads as under :- 4. The submissions are carefully considered. It is seen that the appellant was treated as a Wealthtax assessee and her investment in shares as capital assets. There is no evidence that this was converted into stock-in trade by the appellant during the relevant accounting period. The appellant did not borrow from the Bank and has paid no interest on the investments which are sold and the surplus from which disclosed as long term capital gain. Even if the appellan .....

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aler in shares. Accordingly all the grounds of appeal are allowed and the appeal is allowed. Learned Counsel for the respondent has supported the findings of the Tribunal and has taken this Court to paragraph 6 of the findings as well as to ultimate decision of the Tribunal which reads as under :- 7. Considering all these facts as discussed above particularly considering the overall conduct of the assessee in dealing with the shares and debentures, we are of the view that the Assessing Officer w .....

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