TaxTMI 
TaxTMI 
2014 (8) TMI 676
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....e business of manufacture of Gas mantle and stove. Besides the assessee was also engaged in trading of shares and it has show the shares on hand as its "stock in trade" in the earlier years. As on the beginning of the current year, i.e., on 1.4.2005, the assessee transferred the Shares from "Stock in trade" to "Investment" account. Immediately thereafter, the assessee sold shares, the details of which are furnished at page 83 of the paper book. From the said statement, we notice that the assessee sold shares on 05.04.2005, 19-04-2005, 20-04-2005 and 26-04-2005. Since the assessee had classified the shares as "Investments" as on 01.04.2005, the assessee computed Long term Capital gain of Rs. 28,33,476/- and Short term Capital gain of Rs. 79,....
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....unt so as to reflect its intentions. The Ld A.R placed reliance on the order dated 22-10-2013 passed by Hon'ble Delhi High Court in the case of CIT Vs. M/s Express Securities Pvt Ltd and submitted that the Hon'ble Delhi High Court, in the above cited case, has held that the assessee is entitled to convert the stock in trade into investments on noticing the benefit of exemption provided u/s 10(38) of the Act. He further submitted that the assessee sold the shares, since they were fetching good prices. Accordingly, he contended that the tax authorities are not justified in rejecting the explanations of the assessee. The Ld A.R further submitted that the CBDT has prescribed various criterian to be examined to ascertain the nature of transactio....
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.... into Investments in its books of account and thereafter sold most of the shares within a period of about 20 days. When questioned about the compliance of the provisions of the Companies Act, if any, in this regard, the Ld A.R submitted that the decision taken by the assessee is reflected in the books of account. Thus, it is seen that the entry passed in the books of account to convert stock in trade into investments is not substantiated with any document. The Ld A.R contended that the Ld CIT(A) did not examine the applicability of various tests prescribed by the CBDT in its Circular to determine the nature of transactions. In our view, the examination of the applicability of various tests is not required in the instant case, since the asse....
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.... after the alleged conversion. Hence, under these set of facts, in our view, the Ld CIT(A) was justified in confirming the gains arising on sale of shares as the business income of the assessee by disregarding the claim of Long term Capital gain and Short term Capital gain. Accordingly, the Ground No.1 and Ground No.2 are disposed of. 6. The assessee has raised an additional ground of appeal, wherein it is contended that the assessing officer should have excluded the long term capital gain while computing book profit u/s 115JB of the Act. Since, we have upheld the action of the assessing officer in assessing the gains arising on sale of shares as business income, the additional ground urged by the assessee becomes infructuous and accordi....