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2014 (1) TMI 182 - ITAT HYDERABADWhether the purchase and sale of shares are 'investments' - Held that:- Following Spectra Shares and Scrips Pvt. Ltd. Vs. CIT [2013 (6) TMI 173 - ANDHRA PRADESH HIGH COURT] - The character of transaction cannot be determined solely on the application of any abstract rule, principle or test - No single criterion is decisive in determining the question whether a particular receipt is capital or revenue. The intention of the party, nature of transaction, and various other factors have to be considered cumulatively to find out whether it is investment or trading activity - For deciding whether transactions in shares entered into by the assessee is in the nature of trade, cumulative effect of the various parameters have to be looked into - From the very beginning the assessee is treating the shares as investments only and declaring income from sale of shares as long/short term capital gains - The department has also accepted the claim of the assessee in all other assessment years excepting the two impugned assessment year - The Assessing Officer apart from pointing out two instances of sale of share within a period of one month from the date of purchase has not been able to bring any material on record to disprove the assessee's claim with any cogent or valid reasons - The Assessing Officer accepts assessee's claim of exemption u/s 10(38) of the Act so far as long term capital gain further weakens the reasoning of the Assessing Officer to treat share transaction as trading activity - The Assessing Officer certainly cannot decide the nature of share transaction either as trading activity or investments solely on the basis of period of holding of the shares - During the interregnum it has parked its surplus by investing in shares for appreciation cannot be ignored - Decided against Revenue.
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