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Issues involved: Determination of whether income from sale and purchase of shares should be treated as Short Term Capital Gain or business income.
Summary: The Revenue appealed against the order of the ld. CIT (Appeals) regarding the treatment of income from sale and purchase of shares. The assessing officer contended that the activities of the assessee in buying and selling shares indicated a business activity rather than capital gains. The assessee argued that the shares were held as investments, not for business purposes. The ld. CIT (Appeals) examined the details provided by the assessee and concluded that the profits earned on share transactions should be treated as short term capital gains, not business income. The Revenue argued that profits on share sales should be considered business income due to the volume of transactions and turnover. The assessee maintained that they were long-term investors and the shares were valued at cost price. The Tribunal found that the shares were held as investments, not stock-in-trade, based on the assessee's consistent practice over eight years. The profits from most shares sold within a year were treated as short term capital gains, except for shares bought and sold on the same day, which were deemed speculative transactions. The Tribunal upheld the ld. CIT (Appeals)'s decision to treat the transactions as short term capital gains, except for same-day transactions classified as speculative profits. The appeal filed by the Revenue was decided accordingly. Judgement by K. D. RANJAN, AM: The Tribunal analyzed the nature of the share transactions and upheld the treatment of most profits as short term capital gains, except for same-day transactions considered speculative. The Revenue's appeal was dismissed.
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