Share investment income taxed as capital gains where records and past assessments showed an investment pattern, not trading stock.

Income from share sales was treated as capital gains where the assessee had, for years, held the shares as investments and been assessed on that basis in earlier periods. The Revenue did not dispute that the shares were shown as investment and not as stock-in-trade, and earlier decisions in the assessee's own case supported the same characterisation. The Tribunal noted that transaction volume or frequency alone does not determine business income when the surrounding facts indicate an investment pattern. On that reasoning, the share transactions were assessable under the head capital gains and not as business income.

---

---

Issues: (i) Whether the income from sale of shares was assessable as capital gains or as business income.

Analysis: The assessee had been engaged in share investment activity for many years and had consistently been assessed on capital gains in earlier years. The Revenue did not controvert the factual position that the shares were shown as investment and not as stock-in-trade. The issue stood covered by earlier decisions in the assessee's own case, which had affirmed that the nature of the transactions did not justify treatment as business income. The Tribunal also noted that the volume or frequency of transactions, by itself, was not determinative where the surrounding facts supported an investment pattern.

Conclusion: The income from share transactions was correctly assessable under the head capital gains and not as business income, in favour of the assessee.

Final Conclusion: The assessment could not be sustained on the basis adopted by the Revenue, and the assessee succeeded in getting the disputed addition deleted.

---