2012 (10) TMI 1116

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....is in appeal against the judgment of the Income Tax Appellate Tribunal ('the Tribunal', for short) dated 27-5-2011. For the assessment year 2006-07, the following questions have been presented for our consideration:- A. Whether in the facts and circumstances of the case and in law the Ld. ITAT is right in treating the gain on sale of shares amounting to Rs. 70,15,820/- as longterm....

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.... from salary as well as a sum of Rs. 83,712/- towards receipt from share trading. The assessee had also claimed as exempt income of Rs. 53,96,468/- towards long term capital gain out of sale of shares. The Assessing Officer, however, held that the assessee was trading in shares and accordingly taxed the entire income of Rs. 53,96,468/- as the income from profit and gains of business and profession....

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....finding out the nature of transaction as to whether it is an investment or adventure in the nature of trade, one has to see the intention of the assessee at the time of purchase of the shares. The assessee is only an employee having salary income. In the return of income as seen from the assessment order, the assessee has claimed Rs. 83,712 from share trading and another sum of Rs. 53,84,239 as ex....

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....hase is very clear that it is an investment and not to trade in shares. Merely because, on one or two occasions there was also purchase and sale of shares, we cannot say that the assessee is trading in shares. The transaction as extracted by the assessing officer in the assessment order shows that the assessee never intended to trade in shares and being salaried person intended to investor. Theref....