The ITAT Indore addressed the issue of re-characterizing income ...

ITAT Indore held that frequency alone doesn't determine investment intent. Short-term capital gain vs. business income based on facts. Land sale treated as long-term capital gain despite unregistered agreement. Assessee's declaration upheld.

Case Laws     Income Tax

May 21, 2024

The ITAT Indore addressed the issue of re-characterizing income from share trading as either short-term capital gain or business income. The tribunal found that the Assessing Officer's basis for treating the income as business income was meritless, as the frequency of transactions alone does not determine the intention behind the transactions. The tribunal upheld the CIT(A)'s decision to treat the income as short-term capital gain, emphasizing that the intention behind the transactions is crucial. Regarding the gain on the sale of land based on an unregistered agreement, the tribunal concluded that since both the assessee and the department agreed to pay tax on the transaction, the nature of income should be considered as long-term capital gain, not Income from Other Sources.

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