Sale of shares held as investment is to be treated as capital gain

Chandan Infratech Ltd Vs ITO (ITAT Ahmedabad)

Held that the sale of SIL shares held by the assessee as investment is to be treated as short term capital gain and not as business income.

Facts-

The assessee is engaged in the business of consultancy service, trading, and investment in securities. During the course of assessment proceedings, AO noticed that the assessee had sold shares of Sintex Industries Limited (SIL). AO held that the assessee traded in shares of SIL and earned huge profit and claimed the same as a capital gain. Show cause notice was issued to the assessee and was required to explain why the STCG of Rs. 22.36 crore should not be taxed as business income, since there was no business activity by the assessee other than these sale of SIL shares.

CIT(A) confirmed the same. Being aggrieved, the assessee preferred the present appeal.

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