Dismissing the appeal of the revenue, the Court held that the Tribunal recorded that the land had been acquired many years ago as industrial land, formed part of fixed assets and had been sold in the same state without undertaking any development. The assessee had sold off only a portion of parcels of land held as fixed assets, and that classification as a capital asset was not merely on the ground of accounting treatment, but also on the manner of holding of the asset and the intention and conduct of the assessee over years. Therefore, entire income arising to assessee was assessable under head ‘capital gains’ on transfer of long-term capital asset. Court also held that Circular No. 4 of 2007 dated June 15, 2007 ([2007] 291 ITR (St.) 384) issued by the Central Board of Direct Taxes makes a distinction between shares held as stock-in-trade and as investment, and the different tax treatment to be accorded under the Income-tax Act, 1961 to the two categories. The same methodology as accepted in regard to shares would equally be applicable where a clear and categorical distinction has been made between assets held as investments and as freehold land. The classification as a capital asset is not merely on the ground of the accounting treatment, but also in the manner of holding of the asset, and the intention and conduct of the assessee over the years. (AY. 2004-05)