TaxTMI 
TaxTMI 
2016 (4) TMI 472
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....ed in directing the AO to assess the income as income from capital gain as disclosed by the appellant, as against assessed as business income by the AO." 3. Briefly stated, the facts giving rise to this appeal as enumerated in the first appellate order are that the assessee filed his return of income for the Assessment Year 2008-09 on 29.07.2008 disclosing a total income of Rs. 52,78,229/-. The assessee has offered income under the heads income from business or profession, income from house property, income from capital gains, and income from other sources. The assessee is a financial consultant engaged in the sale of fixed deposits, bonds, mutual fund units and life insurance products as an agent/broker. During the scrutiny assessment p....
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....ous companies and no tax is deducted on the commission received from mutual fund companies in view of the provisions of section 194H of the Income-tax Act, 1961 ['the Act' for short] which stipulates that no such commission or brokerage is liable to TDS. The ld. AR further contended taht the assessee's investment activities are not ancilliary activities and cannot be regarded as commercial activities. 5. After considering the submissions of the assessee, the ld. CIT(A) came to the conclusion as given hereinbelow: "{4.1} The appellant has also credibly argued that the investment in shares was invariably disclosed in the books of accounts as investment and not as stock-in-trade. The shareholding as on 31.03.2008 of Rs. 92,25,827....
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....both an investor and a trader in shares and may have two portfolios, i.e. an investment portfolio comprising of securities which are to be treated as capital assets, and a trading portfolio comprising of stock-in-trade which are to be treated as trading assets. Thus, an assessee may have income under both heads i.e. capital gains as well as business income. The appellant has relied on a number of decisions of the Courts, wherein it has been held that whether a particular holding of shares is by way of investment or forms part of the stock-in-trade is a matter which is within the knowledge of the assessee who holds the shares. It is the substantial nature of the transactions which should form a guide to determine whether the transactions are....
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....ll as to earn dividends, but it cannot be concluded that he was carrying on trading of shares as a business activity. In view of the above discussion, the appellant succeeds in his grounds of appeal and the Assessing Officer is directed to assess the said income as income from capital gains, as disclosed by the appellant. 6. Before us also, the ld. AR reiterated the submissions made before the ld. CIT(A) and relied on the recent CBDT Circular No. 6/2016 dated 29th February 2016 and contended that the ld. CIT(A) was right in directing the AO to assess the income of the assessee as income from capital gain. 7. Per contra, the ld. DR relied on the orders of the AO. However, he fairly conceded that the CBDT Circular No. 6/2016 dated 29th ....
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....ove the intention in acquiring such shares/securities. In this background, while recognizing that no universal principal in absolute terms can be laid down to decide the character of income from sale of shares and securities (i.e. whether the same is in the nature of capital gain or business income), CBDT realizing that major part of shares/securities transactions takes place in respect of the listed ones and with a view to reduce litigation and uncertainty in the matter, in partial modification to the aforesaid Circulars, further instructs that the Assessing Officers in holding whether the surplus generated from sale of listed shares or other securities would be treated as Capital Gain or Business Income, shall take into account the follow....