2007 (7) TMI 258

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....ed by P. P. S. JANARTHANA RAJA, J. - This appeal is filed under Section 260A of the Income Tax Act, 1961 by the Revenue, against the order of the Income Tax Appellate Tribunal, Chennai Bench 'C', Chennai in I.T.A. No.778(Mds)/2005 dated 11.01.2007, raising the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal....

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....income of Rs.5,93,96,140. The Assessing Officer was of the view that since the assessee is a share broker, the income derived from the sale of shares should be assessed only under the head "profits and gains of business". Hence, the Assessing Officer issued notice under Section 148 of the Income-tax Act ("the Act" in short) and completed the assessment holding that income from sale of shares is as....

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....ed only under the head "capital gains". It is also further submitted that the Tribunal ought to have appreciated that the assessee is dealing in shares and hence the profit realised by the assessee should be assessed only under the head "profits and gains of business". Therefore, the Assessing Officer is justified in treating the income derived from sale of shares under the head "profits and gains....

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....to invest in shares. The intention of the assessee is relevant to determine whether he is carrying on the business in shares or investments. On facts, both the first appellate authority as well as the Tribunal correctly held that the surplus derived from the sale of shares has to be assessed under the head "capital gains". The said finding is based on valid materials and evidence and the order of ....