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TMI Blog2004 (11) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax authorities. The Assessing Officer appears to have been observed by the fact that number of shares were sold during the previous year relevant to the assessment year under consideration. It is well settled principles of law that mere volume of transactions would not alter the nature of transaction unless the surrounding circumstances support the same. In the instant case, the assessee s conduct of holding the shares for 10 long years and recording in the books as investment indicate that the shares were held as investment and not as stock-in-trade . We, therefore, accept the contention of the assessee that the profit/loss on sale of shares is assessable to tax under the head capital gains . The Assessing Officer is directed accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )Hindustan Agri Genetics Limited It may be noticed from page-13 of the paper book that the sale price was either higher than the cost price or equivalent to the cost price but for computing the profit under the Income-tax Act under the head capital gains the indexed cost of acquisition was taken into consideration by which the net loss worked out to Rs. 23 lakhs. 4. The Assessing Officer was however of the opinion that the transaction for purchase and sale of shares is assessable to tax under the head profits or gains of business or profession . In this regard, she observed as under: "Considering the volume of the business done by the assessee, the assessee was asked to show-cause why the income/loss on purchase and sale of shares should n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, the learned CIT(A) concluded that the appellant carried on the business of share-trading and shares were not held as investment. 5. Further aggrieved, assessee is in appeal before us. Learned counsel submitted that the conduct of the assessee is reflected from the narration in the balance sheet by recording that the shares were held as investment . He further submitted that most of the shares were held for more than 10 years which itself is a clear indication that the shares were not held as stock-in-trade but as investment . Adverting our attention to page-13 of the paper book, learned counsel submitted that the shares of Good Year India Ltd., Chennai Finance Ltd., and Chennai Seeds Oils Ltd., were purchased about 10 years ago and beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed by the tax authorities. The Assessing Officer appears to have been observed by the fact that number of shares were sold during the previous year relevant to the assessment year under consideration. It is well settled principles of law that mere volume of transactions would not alter the nature of transaction unless the surrounding circumstances support the same. In the instant case, the assessee s conduct of holding the shares for 10 long years and recording in the books as investment indicate that the shares were held as investment and not as stock-in-trade . We, therefore, accept the contention of the assessee that the profit/loss on sale of shares is assessable to tax under the head capital gains . The Assessing Officer is directed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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