Business profit vs STCG

[DEVKUMAR KOTHARI]

Whether a professional person like CA,CS, CWA, doctor, engineer, advocate etc. or a director, company executive can be considered as a 'share trader' instead of 'investor', merely becasue his volume of transactions in sahres, units is high and some time borrowed money is also used. Whether it will be proper for the A.O. to treat transactions in shares and units resulting in business profit and not STCG? In my view such view will be patently wrong because such persons are not known as trader of shares or units by the persons who know to him in commercial world, furthermore, nvestmetn is a commercial adventure and not a trading venture. Shares are capital assets of commercial venture and not stock-in-trade of adventure in nature of trade.

AI Summary

Confusion Over Classifying Professionals as 'Share Traders' vs 'Investors' Sparks Debate on Tax Treatment of Share Transactions A participant questioned whether professionals like accountants, doctors, or company executives could be classified as 'share traders' instead of 'investors' due to high transaction volumes and use of borrowed funds, potentially leading the Assessing Officer to treat share transactions as business profits rather than short-term capital gains (STCG). The participant argued against this classification, suggesting that such individuals are not considered share traders commercially. The response highlighted the confusion faced by both taxpayers and tax authorities in such matters and called for legislative clarity to reduce related disputes.