Share sale gains treated as capital gains where facts showed investment motive, not trading activity.

Profit from a share transaction is determined by the totality of surrounding facts and the assessee's conduct, including holding period, treatment of shares as investment rather than stock-in-trade, repetition of trades in the same scrip, and use of sale proceeds for section 54EC bonds. Concurrent factual findings showed an investment motive, and borrowing funds at a high interest rate alone did not convert the transaction into trading. On that basis, the receipt was treated as long term capital gain and not business income, with no substantial question of law arising from the non-perverse findings.

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Issues: Whether the profit arising from purchase and sale of shares was taxable as long term capital gain or as business income from an adventure in the nature of trade.

Analysis: The assessee held the shares for about fourteen months, had not treated them as stock-in-trade, had not repeated the transaction in the same scrip, and had invested the sale proceeds in NABARD bonds under section 54EC. The appellate authorities recorded concurrent findings that the dominant intention was investment and that borrowing funds at a high rate of interest, by itself, did not convert the transaction into trading. The Court found no perversity, ignored no relevant material, and held that the character of the transaction had to be decided on the totality of facts and circumstances, which supported a capital transaction.

Conclusion: The profit from the share transaction was correctly assessed as long term capital gain and not as business income; the issue was decided in favour of the assessee.

Final Conclusion: No substantial question of law arose from the concurrent factual findings, and the revenue's challenge failed.

Ratio Decidendi: Whether a share transaction is an adventure in the nature of trade must be determined from the totality of surrounding facts and the assessee's conduct; where the evidence shows an investment motive and the findings are concurrent and non-perverse, the receipt is capital in nature.

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