Case Law Details
Shri Ashokkumar Khimraj Vs ITO (ITAT Ahmedabad)
Conclusion: Income from purchase and sale of shares was liable to be taxed under the capital gain instead of income under the head business and profession as the frequency, magnitude of transaction in a systematic manner could not be the criteria to hold that assessee was engaged in the business activity of shares.
Held: Assessee had done transactions of purchase and sale of shares which were very frequent and period of holding of these shares was also very less. AO held that assessee had been carrying on a business of sale and purchase of shares and therefore, assessee was liable to offer the income under the head business and profession. It was noted the intention of assessee at the time of the purchase of shares was paramount. If the assessee had clear intention of being an investor and showing the shares as investment, there was no reason to disturb the intention of assessee. Thus, it was concluded that the frequency, magnitude of transaction in a systematic manner could not be the criteria to hold that assessee was engaged in the business activity of shares. Therefore, AO was directed to treat the income from investment activity under the head capital gain.
FULL TEXT OF THE ITAT JUDGMENT
The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)–10, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-10/ITO Ward-3(1)/104/14-15 dated 26.03.2015 arising in the matter of assessment order passed under s.143(3) r.w.s. 263 of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) dated 16.12.2010 relevant to Assessment Year (AY) 2006-07.
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