share trading

The AO held the assessee to be a trader in shares & assessed the gains as business profits on the ground that (a) there was high frequency & sale transactions, (b) there were instances where delivery was not taken and shares were sold within a short period, (c) 88% of the shares sold were purchased during the year and (d) the available capital was turned over 85 times to make purchases of Rs.23 crores & sales of Rs. 29 crores. This was confirmed by the CIT.. Full Article

The assessee, a director and shareholder in a company engaged in share trading, returned income of Rs. 78,89,499 earned by her on transfer of shares as a “short-term capital gain”. The AO took the view that as there were voluminous transactions, the assessee was engaged in share trading and the income was assessable as “business income”. This was upheld by the CIT (A). On appeal, HELD dismissing the appeal: Full Article

The Securities Exchange Board of India (Sebi) has said that 'in-person' verification of clients is a mandatory requirement for opening account by a depository participant (DP). This will hold good for opening trading account by a stock broker and vice versa, if the stock broker and DP is the same entity or if one of them is the holding or subsidiary company of the other, said Sebi in a note today. Full Article

Where assessee is engaged in trading in share of other companies, the business carried on by the assessee will be in nature of speculative business and profit or loss arising therefrom will be the speculative profit/loss. Full Article

Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment year 1996-97 -Whether though Tribunal is not akin to a Court but functions discharged by it are similar to a Court, and, hence, in addition to its expressed statutory powers it has got inherent power to pass such orders as may be necessary for ends of justice - Held, yes - Full Article

SUMMARY OF CASE LAW Units of mutual fund cannot be equated with shares of a company; hence, loss on purchase and sale of units of mutual fund cannot be treated as loss from speculation business. Full Article

THE Assessing Officer during the course of assessment proceedings observed that the assessee has claimed share trading loss of Rs.7,91,263/ -. From the various bills furnished by the assessee including the brokers notes, the Assessing Officer observed that the assessee has not taken physical delivery of shares purchased but only paid margin money. Since actual delivery of shares were not taken by the assessee the Assessing Officer treated the transactions as speculative .. Full Article