2013 (6) TMI 743 - AT - Income Tax

Summary

Issues involved: Taxability of income under Short Term Capital Gain (STCG) u/s assessment year 2008-09.

Summary:
The Revenue appealed against the order of the Ld. CIT(A)-35, Mumbai regarding the taxability of income under STCG as opposed to business income. The Assessing Officer (AO) questioned the taxability of gains under business income due to the assessee's history as a trader in shares. The assessee explained the shift to being an investor due to health reasons and provided details on the transaction differences. The AO disregarded the explanation, stating that mere book entries were insufficient to determine the nature of transactions and treated the profit as business income. The Ld. CIT(A) found in favor of the assessee, distinguishing between shares traded and invested based on previous years' activities and holding periods. The Tribunal upheld the Ld. CIT(A)'s decision, considering the assessee's transaction details and the ability to maintain separate investment and business portfolios, as established in a relevant judicial decision.

The Tribunal concluded that the assessee's transactions in 23 items with sufficient holding periods indicated an investor profile. Citing the case law of CIT Vs Gopal Purohit, the Tribunal affirmed the assessee's ability to maintain separate investment and business portfolios in dealing with shares. The Tribunal found no reason to overturn the Ld. CIT(A)'s findings and dismissed the Revenue's appeal.