2011 (3) TMI 1728 - AT - Income Tax

Summary

Issues involved: Determination of whether the income from sale of shares should be classified as business income or capital gains.

Summary:

Issue 1: Grounds of appeal not pressed

The appellant did not press ground nos. 1 and 2 of the appeal, leading to their dismissal.

Issue 2: Classification of income

The main issue was whether the income of Rs. 19,12,858/- on sale of shares should be considered as business income or capital gains. The appellant argued that the transactions were delivery-based, supported by documentary evidence, and no loans were taken for investments. The Assessing Officer treated the amount as business income based on CBDT Circular No. 4 of 2007. The Commissioner of Income Tax (Appeals) upheld this decision, leading to the appeal before the Tribunal.

Decision:

After considering the submissions and evidence, the Tribunal analyzed the nature of the transactions. The appellant's trading volume and frequency indicated a substantial trading activity, leading to the conclusion that the appellant was a trader and not just an investor. The Tribunal found that the appellant's intention was to earn profits through regular trading in shares, supporting the classification of income as business income. The Tribunal also referred to similar cases and a CBDT Circular to support its decision. Consequently, the appeal of the assessee was dismissed, affirming the decision of the Commissioner of Income Tax (Appeals).

This summary provides a detailed overview of the issues involved in the judgment and the Tribunal's decision on each issue, maintaining the legal terminology and key points from the original text.