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TMI Blog2015 (5) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... business of investment in shares. Profits from such investment, either directly or through professionally managed firm, would still remain as profits to be taxed as capital gains as the same will not change the nature of investment, which is in shares, and the law permits it to be taxed as capital gains and not as business income. - Decided in favour of assesse. Generation of profits by purchase and sale of shares after availing loan - Held that:- The assessee having taken loan and having invested borrowed funds in purchase of shares, we are of the view that the Income Tax Act does not prohibit the assessee from making investments in capital assets after using borrowed funds. The Tribunal has also considered this aspect of the matter and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the orders of the Commissioner of Income Tax (Appeals), the Revenue filed appeals before the Income Tax Appellate Tribunal. In the first round, the Tribunal remanded the matter to the Commissioner of Income Tax (Appeals), which again held in favour of the assessee. Thereafter, the Tribunal by the impugned order, dismissed the appeals of the Revenue and hence, these appeals have been filed by the Revenue before this Court. 3. We have heard Sri K.V.Aravind, learned Counsel appearing for the appellants as well as Sri K.K.Chythanya, learned Counsel for the respondent and perused the record. 4. Sri K.V.Aravind, learned Counsel for the appellants-Revenue has raised the following two substantial questions of law for determination of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of 'short term or long term capital gains', but should be assessed as 'business income'. 6. He has further submitted that for carrying on such transactions, the assessee had also taken loan, which further fortifies that the assessee was carrying on the business of sale and purchase of shares and the trading activity carried on by the assessee should not be treated as investment and the profits assessed as 'capital gains' but should be treated as 'business income'. 7. On the other hand, Sri K.K.Chythanya, learned Counsel appearing for the respondent-assessee has submitted that merely because the investments were handled by the Portfolio Management Service, the same would not amount to be the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... become business income, we are of the opinion that the said issue has been dealt with at length by the Delhi High Court in the case of Radials International (supra), wherein, in similar facts, the question has been answered in favour of the assessee and against the Revenue. Detailed reasons for the same have been given in the said judgment with which we concur. Even otherwise, it is admittedly not a case where the assessee had engaged its own persons or had a separate business infrastructure to carry out its share transactions for the purpose of business. It is merely a case where the assessee has invested funds through the Portfolio Management Service. 11. In our opinion, investment through Portfolio Management Service, which may deal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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