Issue of taxability of surplus on sale of shares and securities - Capital Gains or Business Income

Capital gains vs business income: listed shares held long term may be treated as capital gains if taxpayer elects, binding later.

Administrative guidance directs assessing officers that where a taxpayer elects to treat listed shares and securities as stock-in-trade transfers will be business income; where listed securities have been held as long-term investments and the taxpayer elects capital gain treatment, that treatment should not be disputed and is binding in subsequent years; in other cases established parameters govern characterisation. The protection excludes transactions whose genuineness is doubtful, including sham transfers, and all other provisions of the Act continue to apply.