Gain on sale of Shares held for 16 years as investment cannot be treated as business income

The facts as stated in the order of the Tribunal reveal that the equity shares were held by the assessee company since 1988- 89 as a long term investment ie. for a period of more than one year prior to the assessment in question and that the said equity shares were transferable through recognized stock exchange meaning thereby that they were listed shares.

The Government of India Ministry of Finance Department of Revenue vide Circular No. 6 of 2016 of the Central Board of Direct Taxes 29th February, 2016 referring to the earlier circular No. 4 of 2009 dated 15th June, 2007 has laid down that in order to reduce litigation, the sale of listed shares would be treated as capital gain if they are held by the assessee for a period of more than 12 months immediately preceding the date of these transfers.

In view of above circular and the above admitted fact that the assessee have held that the said equity shares not only for one year but for more than 16 years and that the shares were listed shares, the income derived from their transfer has rightly been treated as Long Term Capital Gain and not as business income.

In view of above, we find no merit in this appeal and is dismissed.