TaxTMI 
TaxTMI 
2017 (6) TMI 351
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....his common order. 2. We may record facts from Tax Appeal No. 307 of 2017. The appeal is filed by the Revenue challenging the judgement of Income Tax Appellate Tribunal dated 31.5.2016. Following questions are raised for our consideration. "(A)Whether on the facts and in the circumstances of the case and in law, the decision of ITAT in deleting the addition of Rs. 86,15,001/- made u/s 68 of the Act is not perverse to the facts of the case as during assessment proceeding it was established that assessee was not registered as a member with the broker through whom the assessee had claimed to carry out share transactions and thus ignoring that through these fictitious and sham transaction the assessee has taken entries of exempt income? ....
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.... have been accepted in the relevant Assessment Year 2005-2006. The Tribunal noted that the return of the assessee in the Assessing Year 2005-2006 was taken in scrutiny and assessment under Section 143(3) read with Section 147 of the Act was made. During this assessment, none of the purchases of the shares were disturbed. In other words, the revenue has accepted the purchases of the assessee of the shares in question as genuine. The Tribunal therefore was of the opinion that no additions can be made with the aid of Section 68 of the Act when such shares were in the later years sold. 4. Having heard learned counsel for the Revenue on this issue, we are in agreement with the Tribunal. As facts recorded by the Tribunal would suggest, the sha....
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....ment various parameters have been laid down to check whether the sale of shares would lead to business income or capital gain. Despite several judicial pronouncements, the controversy did not subside. Each case would have to be considered individually leading to long drawn litigations. The CBTD therefore in order to reduce the litigations, issued the said circular dated 29.2.2016, relevant portion which reads as under: "2. Over the years, the courts have laid down different parameters to distinguish the shares held as investments from the shares held as stock-in-trade. The Central Board of Direct Taxes ('CBDT') has also, through Instruction No.1827, dated August 31, 1989 and Circular No.4 of 2007 dated June 15, 2007, summarized the said ....
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....cer. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years; (c) In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT. 5. It is reiterated that the above principles have been formulated with the sole objective of reducing litigation and maintaining consistency in approach on the issue of treatment of income derived from transfer of shares and securities. All the relevant provisions of the....