TaxTMI 
TaxTMI 
The assessee is engaged in sale/purchase of Land/property. During the year it has made investment in shares, profit on shares is shown as Short term and long term as the case may be.But A.O. wants to asesses STCG on shares as business income in view of circular 4 /2007 dt 15.06.2007. What is the correct position.
profit on sale of shares
20 Dec 2010 
1 Reply 
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Characterisation of share sale gains: trading intent controls whether they're treated as business income or capital gains for tax.
Whether profit on sale of shares by an assessee engaged mainly in land/property dealings is business income or capital/other income depends on the assessee's trading intent; if securities transactions are not the main objective and are held as investments, gains should be treated as short term or long term capital gains or as Income from Other Sources, with classification determined by purpose, frequency, and the assessee's overall business context. (AI Summary)
Whether profit on sale of shares by an assessee engaged mainly in land/property dealings is business income or capital/other income depends on the assessee's trading intent; if securities transactions are not the main objective and are held as investments, gains should be treated as short term or long term capital gains or as Income from Other Sources, with classification determined by purpose, frequency, and the assessee's overall business context. (AI Summary)
