Tax Tribunal: Shares as Investments = Capital Gains. Delay due to Covid-19. Appeal Allowed.

The Tribunal directed the Ld. AO to treat the income from the sale of equity shares as "Short Term Capital Gain" or "Long Term Capital Gain" based on the assessee's classification of the shares as investments. The Tribunal noted that the intention of the assessee was clear from the Balance Sheet, confirming the shares as "investments." The delay in pronouncing the order was attributed to the Covid-19 lockdown, but the decision aligned with a similar Mumbai Tribunal ruling. Consequently, the appeal of the assessee was allowed, and the decision was rendered on 8th July 2020.

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Issues:
- Discrepancy in treatment of income from sale of equity shares as "Income from business" by Ld. AO and "Income from short term capital gain" by the assessee.
- Classification of equity shares as "investment" or "stock-in-trade" by the assessee.

Analysis:
1. The appellant challenged the order of Ld. CIT (A) upholding the Ld. AO's decision to treat income from the sale of equity shares as "Income from business" instead of "Income from short term capital gain."

2. The Ld. AO observed that since the nature of the assessee's business was trading in shares, the income should be categorized as "Income from business." The Ld. CIT (A) agreed with this view based on the audit report of the Chartered Accountant.

3. The appellant argued that the shares were treated as "investment" in the audited financial statement, not as "stock-in-trade." The appellant provided evidence from the audited financial statement to support this claim.

4. The Tribunal examined the audited statement of account and confirmed that the equity shares were classified as "investments" in the Balance Sheet. The Tribunal noted that the intention of the assessee was clear from the Balance Sheet, despite confusion in the P & L Account.

5. The Tribunal directed the Ld. AO to treat the income from the sale of equity shares as "Short Term Capital Gain" or "Long Term Capital Gain" based on the assessee's classification of the shares as investments.

6. The Tribunal acknowledged the delay in pronouncing the order due to the Covid-19 lockdown but justified it by referring to a similar decision by the Mumbai Bench of the Tribunal. The appeal of the assessee was allowed, and the decision was pronounced on 8th July 2020.

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