2024 (11) TMI 1103

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.... year 2010-11. 2. The assessee in appeal has raised a solitary issue i.e. treating of 'Short Term Capital Gain' on sale of shares as 'Business Income' of the assessee. 3. Shri Salil Kapoor, appearing on behalf of the assessee submits that during the period relevant to the assessment year under appeal, the assessee had sold shares held as investment. The Short Term Capital Gain amounting to Rs. 21,64,49,666/- arising on sale of shares was offered to tax. The Assessing Officer (AO) placing reliance on CBDT Instruction no. 1827 dated 31.08.1989 and 13.12.2005 treated the gain on sale of shares as 'Business Income' of the assessee as against Short Term Capital Gain claimed by the assessee and made addition of Rs. 6,49,34,900/-. The ld. Co....

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....d the order of authorities below. A perusal of assessee's Balance Sheet as on 31.03.2010 (at page 60 of the paper book) reveals that the assessee has shown shares under Capital Assets as Investment, and the income from sale of such shares were reflected in Profit & Loss Account as Short Term Capital Gain. In the past, as well investment in shares has been reflected under Fixed Assets. It is intention of the assessee which has to be seen at the time of purchase of share. As is evident from the accounting treatment, intention of the assessee was to hold the shares as investment and not a trading asset. Thus, the assessee was holding shares in Investment Portfolio. The AO while treating income from sale of shares as 'Business Income' has place....