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2014 (7) TMI 124 - ITAT CHENNAIGain from sale of shares – Capital gain or business income - Whether the gain arising from sale of shares is capital gain or business income – Held that:- A person can be investor as well as trader in shares at the same time - Whether the assessee is an investor or a trader in shares is a question of fact to be decided on the facts and circumstances of each case - shares of blue chip companies have been purchased by the assessee on the same day at different rates at different times - The assessee herself has admitted the fact that she traded in shares of listed companies and in some of the cases the sale and purchase of shares have taken place on the same day - she had no intention to keep the shares to earn dividend or capital appreciation - All these facts clearly show that the assessee has been dealing in shares to earn quick profits. The assessee may have been earning income from salary but this does not defy the fact that the sizeable income of the assessee is from trading of shares - The scale of activity is substantial - The period of holding being very short shows the intention of the assessee on quick profits - The transactions were continuous and regular in a systematic manner - the dividend income of the assessee vis-à- vis her investment in shares is too meager - the assessee has not taken any ground to specifically assail the findings of the AO in holding that the nature of business of the assessee is trading in shares. Once the assessee has not taken any steps to rectify the wrong observation, it is deemed that the same is correct - in the Audit Report (in Form 3CD) the nature of business stated is trading in shares - Even though the shares were shown in the balance sheet as investments and not as stock-in-trade - the shares held by the assessee for longer period may be treated as investment and the profit to be treated as long term capital gain - the magnitude, frequency and volume of transactions gives flavour of business income and the same is considered to be income from business – Decided partly in favour of Revenue.
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