Case Law Details
J.M. Financial Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that shares held as investment is taxable under capital gain. The same cannot be treated as business income on the ground that the assessee was participating in the business of JMMSSPL and had had transferred the controlling/business interest.
Facts- The assessee is a holding company and has made investment in the joint venture in JM Morgan Stanley Security Pvt Ltd (JMMSSPL) in which the assessee is holding 49% along with Morgan Stanley (India) Securities Pvt Ltd (MSSPL) which holds 51% share.
The assessee filed return of income for A.Y. 2008-09 declaring total income at Rs.1191,60,94,839/-. The case was selected for scrutiny and the assessment order under section 143(3) was passed on 06/12/2010 assessing the total income at Rs.1761,62,51,490/-.
During the year under consideration, the assessee has shown long term capital gain of Rs.1730,58,51,513/- on sale of shares in JMMSSPL to MSSPL. AO proceeded to treat this gain as the business income of the assessee for the reason that the assessee was in the business of shares and securities as a broker and was also involved in share trading business. CIT(A) upheld the order of assessment. Aggrieved, the assessee preferred appeal before the Tribunal.
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