Share Transactions Income – Capital Gain or Business Income – Criteria

Gujarat High Court in CIT vs. Rewashanker A. Kothari, (2006) 283 ITR 338 (Guj.), after examining earlier judgments on the question has laid down several parameters / tests which have to be applied to find out when income from transactions in shares / securities should be treated as income from business or the gain which has to be taxed under the head “capital gains”. The parameters/tests are as under:- “(a) The first test is whether the initial acquisition of the subject-matter of transaction was with the intention of dealing in the item, or with a view to finding an investment. If the t...