Law:

Section:

Section 45 of the Income-tax Act, 1961 - Capital gain - Chargeable as Where assessee invested in shares and treated shares as investment in his books of account, intention was manifested by treatment given to such investment that (i) investment was out of own fund and not from borrowed funds, (ii) that the investment was not rotated frequently, (iii) total number of transactions were very few and (iv) all shares purchased were not sold and rather held for quite a number of days in such circumstances Tribunal was justified in holding that respondent-assessee was not a trader in stock but only a investor and further his income on sale of shares was capital gain and not business income Where the question was whether the profit earned by the respondent-assessee on sale of shares was assessable as capital gain and not as profit and gains of business: Held that, the Tribunal observed that the assessee invested in shares and treated shares as investment in his books of account; thus, intention was manifested by treatment given to such investment that the investment was out of own fund and not from borrowed funds, that the investment was not rotated frequently; the total number of transactions were very few; all shares purchased were not sold and rather held for quite number of days. The assessee held also earned huge dividend income from such shares. The Assessing Officer, merely because the total volume of transactions was substantial, was guided to hold the income as business income. However, he failed to recognise that the volume of transactions included the appreciation in shares also and such appreciation had been offered for tax. Hence, the Tribunal was justified in holding that respondent-assessee was not a trader in stock but only a investor and further his income on sale of shares was capital gain and not business income. Ms. Prem Lata Bansal for the Appellant. Salil Kapoor, Sanat Kapoor and Ankit Gupta for the Respondent. JUDGMENT Manmohan, J. - The present appeal has been filed under section 260A of the Income-tax Act, 1961 (for brevity "Act, 1961") challenging the order dated June 23, 2009 passed by the Income-tax Appellate Tribunal (in short "Tribunal")…

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