2016 (6) TMI 1355 - HC - Income Tax

Income from sale of shares - Capital gain or business income - assessee is interested in contending that he is an investor whereas the revenue is interested in contending that the assessee is a dealer in shares - HELD THAT - Whether the assessee is a trader in shares or is an investor is essentially a question of fact. That question has been decided by both the CIT(A) and the learned Tribunal by holding that the assessee is an investor. That finding has now become final. We cannot interfere with the finding. Therefore, the questions formulated do not really arise for determination so far the aforesaid finding is not disturbed

Summary

Issues Involved:
1. Whether the assessee can be treated as a dealer or investor in shares for the assessment year 2005-06?
2. Whether the income earned should be considered as business income or capital gain?

Analysis:

1. The primary issue in this case is whether the assessee should be categorized as a dealer or investor in shares for the assessment year 2005-06. The Income Tax Appellate Tribunal had to determine this classification based on the facts and circumstances of the case. The assessee claimed to be an investor, while the revenue argued that the assessee should be considered a dealer in shares. Both the CIT(A) and the Tribunal concluded that the assessee is an investor, and this finding was deemed final. The High Court, therefore, held that since the classification had been settled and not disturbed, there was no need to address the questions raised by the revenue. Consequently, the appeal was dismissed.

2. The second issue pertains to whether the income earned by the assessee should be treated as business income or capital gain. The revenue contended that the income should be considered as business income, while the assessee argued that it should be treated as capital gain. However, since the primary classification of the assessee as an investor had been established and remained unchanged, the High Court did not delve into the question of whether the income should be categorized as business income or capital gain. The Court's decision to dismiss the appeal was based on the conclusive finding regarding the assessee's status as an investor in shares for the relevant assessment year.