TaxTMI 
TaxTMI 
2005 (7) TMI 277
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.... these appeals is identical i.e., assessability of profit arising to assessee out of sale and purchase of shares, as "business income" or income under the head "Long-term capital gain". According to the claim of the assessee income earned by her from sale and purchase of shares constitutes an income earned out of investment and thus is qualified to be an income earned under the head "Long-term capital gain". As against this claim of assessee the case of revenue is that the activity of sale and purchase of shares carried out by assessee is an activity of business and, therefore, profit earned by assessee from such an activity is assessable under the head "Profits and gains of business or profession." 3. Originally the assessee was earning....
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....essment years 1991-92 and 1992-93 and thus arrived at a conclusion that it was the income earned by assessee from business and for this purpose, he has placed reliance mainly on the decision of Hon'ble Supreme Court in the case of Raja Bahadur Visheshwara Singh v. CIT [1961] 41 ITR 685. The volume of sale and purchase of shares as mentioned in the order of CIT(A) for assessment years 1992-93 to 1994-95 is as under:- A.Y. Purchase Sale 1992-93 14,02,719/- 16,54,885/- 1993-94 42,33,928/- 77,13,385/- 1994-95 33,00,460/- 62,22,128/- The details of return of income, short-term capital gain and long-term capital gain in respect of sale and purchase of shares is as under:- A.Y. Returned income....
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....rader, who buys shares from the secondary market with intention of selling them quickly for earning profit would not send the shares to the companies for transfer in his or her name as the same will take considerable time. Thus the assessee who has got transferred the shares in her name after purchasing the same from secondary market also are not the transaction done as a result of trade. Keeping in view these facts, ld. CIT(A) has held the profit earned by assessee from the shares purchased by her from primary market and also from shares which were got transferred by her in her name was not assessable as "profit from business or profession" and was assessable as long-term capital gain. He further held that the profit arising to assessee ou....
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....ja Bahadur Visheshwara Singh and contended that the order of Assessing Officer in this regard should be upheld and that of CIT(A) should be set aside. 6. On the other hand, ld. AR of the assessee contended that substantial part of purchase of shares was made by assessee in the primary market i.e., by submitting application in public offer. The assessee did not employ any borrowed fund for purchasing the shares as she did have her own surplus money which was invested in the purchase of shares. The investment was made in the shares for investment purpose and not with an intention to carry on business activity. He, therefore, pleaded that ld. CIT(A) was right in holding that the income of assessee from sale of shares is assessable as income....
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....9;business' has not been defined in the taxing statute yet it postulates the existence of certain elements in the activity of an assessee which would invest it with the character of business. According to well-established interpretation of word 'business' as found in taxing statutes it is the sense of an occupation or profession which occupies the time, attention and labour of a person normally with the object of making profit. To record an activity as business there must be of course of dealings either actually continued or contemplated to be continued with a profit motive and not for support or plier. Whether or not a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and re....
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....s from primary market is only one of the modes of purchase, the only difference is that if the same are purchases from the market the assessee may have paid more price for it. Merely for the reasons that assessee has to wait for two to three months for allotment process, the transaction cannot be held to be a non-business transaction. Similarly the transfer of shares purchased from secondary market in the name of the assessee has little relevance to arrive at a conclusion that profit arising out of sale of those shares is also a non-business transaction as non-transfer of those shares in the name of the assessee may have effected the legal title of assessee to enable her to sell them at appropriate time. 9. The reliance by the ld. AR of ....