Case Law Details
Chandra Ramesh Vs ACIT (ITAT Chennai)
ITAT Chennai held that income from listed shares and securities which had been treated as stock in trade by assessee is taxable under the head income from business and profession and not under the head capital gain.
Facts- The assessee is an individual and engaged in the business of trading in shares and securities and also rendering consultancy services in the financial sector. The assessee was a member of Bangalore Stock Exchange in individual capacity and a director of CFRS, a member of NSE. The assessee had filed his return of income for the assessment year in question and declared profit/loss arising from purchase and sale of shares and securities, under the head income from business and profession. AO, assessed profit/loss derived from trading in shares and securities under the head capital gains.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the CBDT, vide Circular No. 6/2016 dated 29.02.2016, has clarified the issue of taxability of surplus on sale of shares and securities and as per said Circular, it had been very well explained that “where the assessee itself, irrespective of the period of holding of the listed shares and securities opted to treat them as stock in trade, the income arising from transfer of such shares/securities would be treated as business income. Since, the CBDT itself accepted the position of taxation of profit arising from purchase and sale of shares under the head income from business or profession, wherever the assessee wants to do so, in our considered view the Assessing Officer ought to have accepted the claim of the assessee when the assessee has claimed the income under the head business or profession.
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