2014 (9) TMI 97

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....by the Revenue in the case of MG Shares & Stock Pvt. Ltd., relates to assessment year 2006-07 and impugns order dated 8th August, 2013 passed by Income Tax Appellate Tribunal (Tribunal, for short). The issue raised is whether short term capital gains of Rs. 68,06,698/- on sale of shares, should be assessed as income from business. 2. The respondent-assessee during the relevant time was a regist....

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.... accepted and admitted that the respondent assessee was maintaining two separate portfolios; one of shares held as investment and the other of shares held as stock-in-trade. On the date of purchase, shares became part of one of the portfolios and were accordingly treated either as investment or as a stock-in-trade. The respondent assessee on the basis of the two portfolios, had declared taxable in....

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....ich investments were made in the assessment year 2006-07, were not sold in the said year. Contra, in the trading portfolio for the assessment year 2006-07, there were hundreds of transactions and trading was to the tune of thousands of shares in 199 companies. In the investment portfolio, in the current year shares of seven companies were sold and gains were made. There were 23 transactions of pur....

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.... the impugned order. The Assessing Officer had observed that the respondent-assessee had shown income of Rs. 21,40,752/- as business income from sales of shares, whereas, short term capital gains, as declared, were 68,06,698/-. This is correct but these figures, by themselves, would not justify treating the entire short term gains as business income. Business income from trading in shares can resu....