Shares held by trust for issuance to employees as ESOPs is not in nature of stock in trade, any resultant gain will be taxed as capital gains

Brief of the Case

ITAT Mumbai held In the case of Mahindra & Mahindra Employees Stock Option Trust vs. ADCIT that the attributes available in the transaction of the assesee trust are unlike that of a trader and are more like that of an investor. The assessee trust is not free or authorized to sell the shares to any person in the free market at fair market price. Under such circumstances, the assessee trust is not in a position to earn maximum profits. In the case of a trader, the motive is to

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