2013 (1) TMI 883 - HC - Income Tax

Summary

Issues involved:
The issue involves the treatment of profit on the sale of shares as capital gain instead of income from business, under Section 260-A of the Income Tax Act, 1961.

Summary:

1. Background of the case:
The appeal pertains to the assessment year 2004-05 where the assessee, a member of U.P. Stock Exchange Association Ltd., declared income from dealing in shares and securities along with income from long-term capital gain. The Assessing Officer considered the income from the sale of shares as business income, leading to an addition of a certain amount to the assessee's income.

2. Appeal and Tribunal's decision:
The Commissioner of Income Tax (Appeals) allowed the appeal of the assessee, citing previous assessment years and CBDT Circular. Subsequently, the Tribunal upheld the decision of the CIT (Appeals), dismissing the appeal of the Revenue.

3. Argument and Court's analysis:
The Senior Standing Counsel contended that the income from the sale of shares should be treated as business income due to the assessee being a share broker. However, the Court noted that the funds used for purchasing the shares were from the business, making the profit long-term capital gain. The Court referred to previous judgments and upheld the decision in favor of the assessee, highlighting the settled nature of the controversy.

4. Conclusion:
Considering the arguments presented and the precedents cited, the Court found no merit in the appeal and dismissed it accordingly.