Share transactions classified by dominant intention and surrounding facts as capital gains, not business income.

Share transactions are classified by the totality of circumstances and the assessee's dominant intention, applied with CBDT guidelines distinguishing investment from trading. On the facts, substantial own funds, consistent disclosure of shares as investments in the balance sheet, and the assessee's full-time medical profession supported an investment character. The surrounding circumstances did not indicate a trading motive, and the factual findings were not shown to be perverse or unsupported by the record. The transactions were therefore treated as capital gains rather than business income.

---

---

Issues: Whether the share transactions were to be assessed as business income or as capital gains.

Analysis: The classification of share transactions depended on the overall facts, including the CBDT circular guidelines on examining whether the dominant purpose was investment or trading. The authorities below found that the assessee's own funds were substantial, the shares were consistently shown as investments in the balance sheet, the assessee was engaged in a full-time medical profession, and the surrounding circumstances did not support a trading motive. These findings were factual and were not shown to be perverse or unsupported by record.

Conclusion: The share transactions were rightly treated as capital gains and not as business income, in favour of the assessee.

Ratio Decidendi: The true nature of share transactions is determined from the totality of circumstances and the assessee's dominant intention, applied in light of the CBDT guidelines on distinguishing investment from trading.

---