2016 (7) TMI 1087

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....iness income and not under the head capital gains when the assessing authority has rightly treated the same as business income considering the intention of assessee for making profit by making investments in shares and materials on record which disclosed that assessee is a trader in stocks?" 2. We have heard Mr. E.I. Sanmathi, learned Counsel appearing for the appellants-Revenue. 3. It appears that after the matter was remanded earlier by the Tribunal. The Assessing Officer further considered the matter and found that merely because the purchase of the shares were shown as investment in the balance sheet is no ground to conclude that it was not the stock-in-trade and ultimately, found that it is profit of business and not a capital ga....

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.... that the sale proceeds represent income from business. In view of this the A.O is directed to treat the income on sale of shares as income from long term capital gains and accordingly the appeal is Allowed. The aforesaid shows that the CIT (Appeals) found that as the investment was made from the fund of the Company and the investment made was shown as investment at the cost value from the inception, it could not be termed as stock-in-trade and therefore, it should be treated as long term capital gain. 4. The Income Tax Appellate Tribunal in the appeal at paragraph-5 interalia observed, the relevant of which is as under: "We find that the AO has not given any reasons for not accepting the assesse's contention and also as to how the....

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....ing treatment to the income of the property of the assessee as that from the investment or as a business income was also required to be considered in light of the factual aspects that what treatment was given to the income earned from the property whether it was that of the business income or the income from the house property. 8. In the present case, the peculiar facts are that the investment made was shown as investment and the cost was reflected throughout in the balance sheet and it was never treated as stock-in-trade. Further, if it was to be treated as stock-in-trade and the market value plus cost would have been considered, but such was not treated accordingly by the assessee in the books of accounts. There was also lock-in period....