Determination of dealers in shares. - Income Tax - 1709/CBDT

INSTRUCTION NO. 1709/CBDT Dated: April 29, 1986 The Public Accounts Committee in Para 67 of their 206th Report has inter-alia commented that the Central Board of Direct Taxes should issue necessary guidelines to the field formations on the tests to be applied to determine who are dealers-in shares. They had further observed that the Board should also issue instructions to the lower formations to take special care to scrutinise the balance sheets and profit and loss accounts of such assessee companies as claim to be 'dealers-shares.' 2. The matter has been considered by the Board. It has been decided that it is not practicable to lay down guidelines on the tests to be applied to determine who are dealers in shares. The assessing officers are, however, directed to examine all aspects of the matter and determine whether or not the shares acquired by the tax-payer represent his trading assets or investments. The assessing officer also must take special care to scrutinise the balance-sheets and profit and loss accounts of such assessee companies as claim to be dealers in shares. 3. These instructions may please be brought to the notice of all officers working in your charge. 4. Hindi version will follow.