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2013 (7) TMI 801 - ITAT HYDERABADIncome derived from sale of shares - capital gain v/s income from business or profession - Held that:- As can be seen from the submission made by the assessee in earlier years i.e., till assessment year 2005-06, the assessee's income has been accepted as capital gain, further the assessee being an investor has not borrowed any fund to make investment in shares but has used his own funds. There is also no intra-day transaction. If these facts are correct and the assessee has used his own funds and carried on the activities as investor and is consistently showing the income under the head capital gain and the department was also accepting this position upto assessment year 2005-06 then the ratio laid down by the Hon'ble jurisdictional High Court in case of M/s Spectra Shares and Scrips V/s. CIT (TMI ID= 234348 2013 (6) TMI 173 - ANDHRA PRADESH HIGH COURT) would apply. CIT(A), though, in his order has mentioned specific instances of shares being held for a very short period while coming to his conclusion that the assessee is not an investor but is engaged in a trading activity. However, he has not properly examined the facts whether the assessee has used his own funds and not borrowed funds in the investment in shares, the department has been accepting the income from shares as capital gain upto assessment year 2005-06, there is no intra-day transactions. These facts definitely will have a bearing in coming to a conclusion as to whether the income from shares should be assessed as income from business or capital gain. Since neither the AO nor the CIT(A) have examined all these aspects, the entire issue of activity in shares is in the nature of investment or trading requires to be considered again considering ratio laid down in PVS Raju V/s. CIT ( 2011 (7) TMI 818 - Andhra Pradesh High Court) and M/s Spectra Shares and Scrips (supra) - appeal of assessee is allowed for statistical purposes.
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