COURT: | ITAT Jaipur |
CORAM: | Laliet Kumar (JM), T. R. Meena (AM) |
SECTION(S): | 28, 45, 48 |
GENRE: | Domestic Tax |
CATCH WORDS: | Business profits, capital gains, Profit on sale of shares |
COUNSEL: | Rajiv Sogani |
DATE: | March 18, 2016 (Date of pronouncement) |
DATE: | April 18, 2016 (Date of publication) |
AY: | 2008-09 |
FILE: | Click here to view full post with file download link |
CITATION: | |
In view of CBDT Circular No. 6/2016 dated 29.02.2016, if assessee has consistently shown shares as an “investment” and offered gains as capital gains, AO is not entitle to urge that the same constitutes “stock-in-trade” and assess gains as business profits on grounds that there were substantial and frequent transactions and motive was to earn profit and holding period of such shares was very short |
Before us the moot question which is required to be decided is whether the income earned by the assessee on account of share is required to be treated as business income or required to be treated as short term capital gain. After the matter was heard on 11.02.2016, the CBDT came out with the Circular No. 6/2016 dated 29.02.2016 in the following manner. In view of the circular, we have clearly noticed that the issue raised in this appeal stands fully covered by the Circular issued by the CBDT. Since the assessee has treated the securities as investment and not as stock in trade in all the years, therefore, in view of the CBDT Circular, the revenue is not permitted to take a contrary view in the present year and claimed that the security is stock in trade and, therefore, the profit/gain caused to the assessee be treated as business income. In our view, there is no merit in the contention of the revenue and is deserves to be dismissed in view of the circular.
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