Gains on shares held in investment portfolio not assessable as business profits

The intent and purport of the CBDT circular No.4/2007 dated 15.06.2007 is to demonstrate that a tax payer could have two portfolios, namely, an investment portfolio and a trading portfolio. In other words, the assessee could own shares for the purposes of investment and/or for the purposes of trading. In the former case whenever the shares are sold and gains are made the gains would be capital gains and not profits of any business venture. In the latter case any gains would amount to profits in business. This has been made clear by the CBDT circular in the remaining portion of the circular itself.

HIGH COURT OF DELHI

Judgment delivered on : 09.01.2013

ITA No.703/2012

COMMISSIONER OF INCOME TAX-VII

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