Click Here For Best Books On Taxation & Law. Upto 60% Off On Select Titles. Free Shipping & Pay On Delivery!
 

Click Here To Subscribe To Our Free Newsletter

Home › All Judgements › J. M. Share & Stock Brokers vs. JCIT (ITAT Mumbai)

J. M. Share & Stock Brokers vs. JCIT (ITAT Mumbai)

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: January 18, 2009 (Date of publication)
AY:
FILE:
CITATION:

Tests to distinguish shares held as “stock-in-trade” and as “investments”

Where the assessee was a stock broker but it was consistently following the practice of holding some shaes as ‘stock in trade’ and other shares as ‘investments’ and the question arose whether the profits on the sale of shares held as investments constituted a capital gain or business profits, HELD:

(i) The assessee had been consistent in its practice of treating some shares as stock and others as a capital asset. While the shares held as capital asset were valued at cost in the accounts, the shares held as stock-in-trade were valued at the lower of cost or market value;

(ii) There is no bar on a stock broker holding shares as an investment. The mere fact that the assessee is an expert in share trading does not mean that he cannot hold shares as a capital asset. The magnitude of the transaction does not change the nature of the transaction.

Note: ACIT vs. Motilal Oswal was followed.

See Also: Circular No. 4/2007 dated 15.06.2007 and Taxation of Securities Transactions by CA Gautam Nayak

Related Posts:

  • CIT vs. JRD Stock Brokers Pvt Ltd (Delhi High Court) The legal position in respect of an accommodation entry provider seeking the benefit of ‘peak credit’ appears to have been totally overlooked by the ITAT in the present case. Indeed, if the Assessee as a self-confessed accommodation entry provider wanted to avail the benefit of the ‘peak credit’, he had…
  • Soman Sun Citi vs. JCIT (ITAT Mumbai) No prejudice is caused to the assessee by non granting of opportunity of cross examination by the authorities below as right of cross examination is not absolute as in the instant case even primary onus that fell on the assessee did not stood discharged. Had assessee discharged its primary onus,…
  • Uber India Systems Pvt. Ltd vs. JCIT (ITAT Mumbai) So far as the penalty proceedings are concerned, the assessee has made out a prima facie case in favour of the assessee proving that the outcome of the appeal before ITAT will directly impact the proceedings which are hurriedly being finalized by the authorities below, which may entail huge liability…
  • Ratanlal C. Bafna vs. JCIT (ITAT Pune) Considering the totality of the facts involved in the present case and in view of the decisions cited hereinabove, we are of the view that in the present case since the appeal against the order of the Tribunal has already been admitted and a substantial question of law has been…
  • Nokia Networks OY vs. JCIT (ITAT Delhi Special Bench) HELD by majority in favour of the assessee: According to the Supreme Court in Formula One World Championship Ltd. vs. CIT, reported in 394 ITR 80 (SC), the ‘disposal test’ is paramount which needs to be seen while analyzing fixed place PE under Article 5(1). Though in our humble understanding,…
  • Chambal Fertilisers And Chemicals Ltd vs. JCIT (Rajasthan High Court) That on a plain reading of the above provision of section 40(a) (ii), it is evident that a sum paid of any rate or tax is expressly disallowed by this sub-clause in two cases : (i) where the rate is levied on the profit or gains of any business or…

Related Judgements

  1. Sumit Bhattacharya vs. ACIT (ITAT Mumbai Special Bench) 

    (i) Amounts received by an assessee from the foreign holding company of his employer company on redemption of stock appreciation rights, being “fruits of employment” is chargeable to tax as “salaries” despite the absence of an employer-employee relationship (ii) there … Sumit Bhattacharya vs. ACIT (ITAT Mumbai Special…
  2. Amadeus Global Travel vs. DCIT (ITAT Delhi) 

    (i) The Amadeus system, by which subscribers in India are enabled to perform the functions of reservation and ticketing, represents a “business connection” because it extends to the Indian territory in the form of connectivity in India and generates income … Amadeus Global Travel vs. DCIT (ITAT Delhi)…
  3. ACIT vs. M/s Triace (ITAT Mumbai) 

    Where the CIT (A) decided the ground of reopening against the assessee but decided the ground of merits in favour of the assessee, the assessee is entitled, in an appeal by the Revenue before the Tribunal, to urge, under Rule … ACIT vs. M/s Triace (ITAT Mumbai) Read…
  4. R. B. K. Securities vs. ITO (ITAT Mumbai) 

    Even prior to the amendment to s. 43(5) by the Finance Act 2005 w.e.f 1.4.2006, dealings in Futures & Options and other derivatives products cannot be treated as speculative transactions as they are special kind of transactions, not involving purchase and sale of shares and consequently the loss…
  5. DCIT vs. Balaji Shipping (1.6 MB) (ITAT Mumbai) 

    Where the assessee had earned freight income by transporting cargo in international traffic through ‘slot charter’ arrangements on ships owned by other enterprises and the question arose whether such profits arose from “operation of ships”, held: that in view of the OECD Commentary, Article 9 of the India-UK DTAA…