Dismissing the appeal of the revenue the Court held that, the circular makes no distinction whether the investments made in shares were out of borrowed funds or out of its own funds. That the Department was bound by Circular No. 6 of 2016 dt. February 29, 2016 ( 2016) 382 ITR 14 (St) . However, the stand once taken by the assessee would not be subject to change and consistently the income on the sale of securities which are held as investment would continue to be taxed as long-term capital gains or business income as opted for by the assessee ( AY.2008 -09)
CIT v. Hardik Bharat Patel. (2019) 410 ITR 202 /260 taxman 294(Bom.)(HC),Editorail : SLP of revenue is dimissed , as withdrawn due to low tax effect, PCIT v. Hardik Bharat Patel ( 2020 ) 269 Taxman 562 (SC)
S. 45 : Capital gains- Business income-No distinction can be made whether borrowed money or own funds–Circular is binding on department -Consistency must be followed -Surplus from sale of shares is assessable as capital gains and not as business income. [S. 28(i)]