2017 (3) TMI 1899

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....al loss. 3. The brief facts of the case is that the AO during the assessment proceedings noted that the assessee has purchased five scrips on 14.03.2008 and sold the same on 04.11.2008 through stock broker DSP Merillynch. It was noted by the AO that in the entire year there was no other transactions except for these transactions. However, the assessee has claimed the same as business transaction and has debited Rs.1,00,92,237/- as expenses against the sale of shares of Rs.17,67,845/-. The AO noted that there was no other business of the assessee other than the real estate and this investment. Therefore, the AO asked the assessee as to why the sale of shares should not be considered as yielding capital gain and not income from business. T....

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.... "I have considered the submissions put forth on behalf of the appellant and the findings of the AO. I find from the assessment order that as per the AO there was only one transaction of sale of shares, that only opening stock of shares which was sold, that in last five years the share business was negligible and substantial part of the activity of the appellant was that of earning of rent and maintenance charges. Therefore as per the AO the shares were held as investments and there was no trading of shares and business income is to be computed at nil. In my opinion, the action of the AO is not sustainable............" Aggrieved by the aforesaid order of the Ld. CIT(A) the revenue is before us. 4. We have heard rival submission....

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....016 has noted the dispute which consistently arose in respect to treatment of trading of shares as business or investment in shares. From a perusal of para 3(a) of the said circular, we note that the CBDT has given clear direction that where the assessee has treated the listed shares and securities as stock-in-trade, irrespective of the period of holding, the income arising from transaction of such shares/securities would be treated as its business income. The only condition expressed by the CBDT Circular is that once the assessee has taken a stand in an assessment year that he is trading in shares as business, or as investment, then he should not change, which means that the assessee should be consistent. We note that the assessee in AY 20....