2017 (8) TMI 1430 - HC - Income Tax

Income derived from the sale of shares - business income OR short terms capital gain - Held that - It has been observed by the Commissioner that only 10 scripts are traded. It was not a case of the repeated sale of the same script. It was not a case of frequent buying and selling to make quick money. The intention can be proved by the conduct of the assessee after the purchase. The CIT(A) has given the details of the 10 scripts out of which short term capital gain was claimed. Upon appreciation of the evidence plausible conclusion has been arrived at by the CIT(A) and the Tribunal more over for past three assessment years also the income of the assessee through sale of shares is held to be short term and long term capital gain. The said order is accepted by the Revenue. No substantial question of law arises. The Appeal is dismissed.

Summary

Issues: Determination of income from sale of shares as business income or short term capital gain for Assessment Year 2008-09.

Analysis:
1. The appellant argued that the Assessing Officer correctly classified the income from sale of shares as business income due to frequent transactions, while the CIT(A) and Tribunal erred in reversing this decision. The appellant's holding period for shares was less than one month.

2. The respondents supported the order classifying the income as short term capital gain.

3. The High Court reviewed the judgments of the CIT(A) and Tribunal, noting that the classification of income from share sales as business income or capital gain depends on the specific facts of each case. The Commissioner observed that only 10 scripts were traded, not repeatedly, and there was no frequent buying and selling for quick profit. The intention behind the transactions was crucial, and the CIT(A) provided details of the 10 scripts for which short term capital gain was claimed.

4. After evaluating the evidence, the High Court upheld the concurrent findings of the CIT(A) and Tribunal, emphasizing that no substantial question of law arose. The previous assessment years also treated the income from share sales as short term and long term capital gain, a decision accepted by the Revenue.

5. Consequently, the High Court dismissed the appeal, concluding that the facts supported the classification of income as short term capital gain, and no interference was warranted. No costs were awarded in the matter.