Case Law Details
Shri Dev Ashok Karvat Vs. DCIT (ITAT Mumbai)- In Mr. Chetan R.Parikh V/s ITO in ITA No. 1569/Mum/2010 (AY: 2006- 07) dated 25.05.2011, it has been held by the Tribunal that the units of mutual funds are not generally a trading instrument because of comparatively low fluctuation and number of transactions in units are also not large.
Therefore in our view the purchase and sale of units has to be considered as investment activity. Applying the ratio of the above decisions to the facts of the present case it becomes abundantly clear that the transactions in the shares and mutual funds were made by the assessee as investor and not as a trader, therefore, the profit earned from the said transactions is short term capital gain, not business income and accordingly, we while reversing the orders of the AO and the ld. CIT(A) on this account direct the AO to treat the profit from purchase and sales of shares and mutual funds of Rs.10,52,137/- as income from short term capital gains and not business income.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No. 6345/Mum/2010- (Assessment Year: 2006- 07)
Shri Dev Ashok Karvat
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