Mere Holding Shares for a Short Period will not convert capital gain into business income

Pr. CIT Vs Khaitan Chemicals Ltd. (Rajsthan High Court) HC observed that the issue of classification of income on the sale of shares as business income or as short-term capital gains is to be decided the facts of each case. The tests to be applied for such determination is provided in CBDT Circular No.4 of 2007. We note that the Tribunal kept in mind the tests as provided in the above Circular in the context of the facts and found is that these investments were out of its own funds and not borrowed funds, further it maintained a distinction between trading in shares and investments. Thus, two ...