Share sale gains treated as capital gains where intention, holding period, and transaction pattern showed investment activity.

Gain on sale of shares is classified by reference to the factual matrix, especially the purchaser's intention at acquisition, the period of holding, and the volume and frequency of transactions. Where the assessee acquired and retained shares as investments, and the transaction pattern did not show trading activity, the correct treatment is capital gains rather than business income. Concurrent factual findings that the assessee was an investor, not a trader, were upheld, and no substantial question of law arose on those facts.

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Issues: Whether the gain on sale of shares was assessable as business income or as capital gains, and whether the assessee was an investor rather than a trader in shares.

Analysis: The concurrent factual findings showed that the assessee had acquired and held the shares as investments, that the volume and frequency of transactions did not indicate trading, and that the bulk of the shares had been retained for a long period before sale. The decisive factor was the intention at the time of purchase, read with the surrounding circumstances, including the pattern of holding and sale. On those facts, the classification adopted by the appellate authorities was held to be correct and no substantial question of law arose.

Conclusion: The gain on sale of shares was rightly treated as capital gains and not as business income, and the assessee was rightly regarded as an investor.

Ratio Decidendi: Classification of share transactions depends on the factual matrix, especially the purchaser's intention, the period of holding, and the volume and frequency of transactions; where concurrent findings show investment activity and not trading, no question of law arises.

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