TaxTMI 
TaxTMI 
2014 (1) TMI 490
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.... was admitted vide order dated 4.8.2010 for considering the questions of law as mentioned in para 7 of the appeal which are as under:- (i) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in holding that the sale of shares by the assessee was a capital gain and not profit and gain from business? (ii) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was correct in directing the department to follow the principal of consistency and holding that the department cannot depart from the accepted position in the earlier years?" 2. Put shortly, the facts necessary for adjudication of the present appeal as narrate....
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....l gain instead of business income. Hence, the present appeal by the revenue. 3. Learned counsel for the appellant submitted that the investments made by the assessee in the shares and the sales thereof was exigible under the head profit and gain from business and not capital gains as has been held by the Tribunal. 4. After hearing learned counsel for the appellant, we do not find any merit in the appeal. The Tribunal while rejecting the contention of the revenue had held as under:- "5. We have considered the rival submissions carefully. We have also perused the precedent referred the CIT (Appeals) in support of his conclusion that the activity of the assessee ....
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....is not a case where a person is investing in shares as a business proposition of deal in the shares. The investment made in the shares of the companies which are jointly promoted by the assessee along with the private entrepreneurs, is with the basic object of promoting agro/horticulture based industry in the State of Punjab and not as a dealer in shares with the object of trading. In fact, the object of trading in shares is lacking in as much as the financial collaboration agreement itself prescribes that the shares shall be bought back by the private promoter after a specified period at a defined consideration. In fact, in the case of PSIDC Ltd. (supra), the Tribunal has also considered similar aspects and have held that the realization o....
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....sp; "11. In the present case, as has been found by the Tribunal, the assessee was advancing the industrial policy of the State and in that process, investment was made in the new projects and after level of self sufficiency was achieved, disinvestment was done. The view of the Tribunal that realization of investment was liable to tax under the head capital gains was certainly a possible view, particularly when the revenue itself has been accepting this position upto the assessment year 1989-90. Judgment of Madras High Court, in facts of the present case, does not support the stand of the revenue. 12. Whether income in a particular case falls under the head of capital gains or business....
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....e facts and circumstances. XX XX XX XX 13. Where a purchase is made with the intention of resale, it depends upon the conduct of the assessee and the circumstances of the case whether the venture is on capital account or in the nature of trade. A transaction is not necessarily in the nature of trade because the purchase was made with the intention of resale [see Jenkinson v. Freeland (1961) 39 Tax Cases 636; Radha Debi Jalan v. ClT (1951) 20 ITR 176 (Cal); India Nut Co. Ltd. v. ClT (1960) 39 ITR 234 = AIR 1959 Ker 298; M/s. Sooniram Poddar v. ClT (1939) 7 ITR 470 (478-479) = AIR 1939 Rang 337; at p. 338; Ajax Products Ltd. v. ClT (1961) 43 ITR 297 (310) (Mad); Gustad Irani v. ClT (1957) 31 ITR 92 (Bom); and Mrs. Alexander v. ClT (1952....