Year-wise scrutiny required to classify share transactions as capital gains or business income; matter remanded for fresh factual review.

Whether share transactions constitute capital gains or business income must be determined year by year on the specific factual matrix, including holding periods, frequency of dealings and other relevant criteria. The Tribunal could not treat the assessee as a trader in shares for the relevant years without examining the transactions for assessment years 2007-08 and 2008-09 independently, especially where earlier years had been relied on generally by the lower authorities. The matter was therefore remanded to the Tribunal for fresh consideration on the relevant facts, and the issue was answered in favour of the assessee.

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Issues: Whether the Tribunal could treat the assessee as a trader in shares for the relevant assessment years without examining the factual matrix for each year.

Analysis: The Tribunal's conclusion was reached without a detailed examination of the facts relating to assessment years 2007-08 and 2008-09. The record showed that the Assessing Officer and the Commissioner (Appeals) had largely relied on earlier years, while the Tribunal also recorded a general conclusion without analysing the year-wise transactions, holding periods, frequency of dealings, or other relevant criteria. Since the character of share transactions may vary from year to year, a conclusion on whether income is assessable as capital gains or business income requires scrutiny of the specific facts of each assessment year.

Conclusion: The issue was answered in favour of the assessee and the matter was remanded to the Tribunal for fresh consideration on the relevant facts.

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