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2013 (11) TMI 1654 - HC - Income TaxTransaction of share - Nature of income - LTCG or business income - Held that - When in the earlier assessment order i.e for the Assessment Years 2004-05 and 2005-06 the same were treated as investment in shares and the Assessing Officer accepted the same as investment in shares, no error has been committed by the ITAT as well as the CIT(A) in deleting the addition made by the Assessing Officer in treating it as business income for the purpose of short term capital gain and long term capital gain.
Issues:
1. Whether the appellate tribunal was right in confirming the order of the CIT(A) deleting the addition of Rs. 32,56,559 made by the AO on account of business income and directing the AO to treat the same as long term capital gain as claimed by the assessee without discussing the merits & findings of the A.O. in the assessment order? Analysis: 1. The appellant challenged the order of the Income Tax Appellate Tribunal (ITAT) for the Assessment Year 2009-10 regarding the treatment of income from share transactions. The Assessing Officer initially considered the income of Rs. 32,56,559 as business income due to frequent sale and purchase of shares by the assessee. However, the CIT(A) allowed the appeal and directed the income to be treated as long term capital gain. The ITAT, relying on a previous decision for the Assessment Year 2005-06, dismissed the revenue's appeal. The High Court noted that in the earlier assessments, the same shares were treated as investments, not business income. Therefore, the ITAT and CIT(A) did not err in deleting the addition made by the Assessing Officer. 2. The High Court further emphasized that since the shares in question were previously treated as investments in the Assessment Years 2004-05 and 2005-06, there was no mistake in treating them as long term capital gain instead of business income. The Court found no reason to interfere with the ITAT's judgment, stating that no substantial question of law arose in the appeal. Consequently, the Court dismissed the appeal, upholding the decision of the ITAT and CIT(A) regarding the treatment of the income from share transactions.
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