Income from Share Transactions is Taxable as ‘Capital Gain’ if the ‘Initial Intention’ of assessee was to make Investment

The Kolkata bench of the ITAT, while considering the case of I.T.O, Wd-12(1), Kolkata Vs. M/s Nupur Carpets Pvt. Ltd, held that the income from share transactions is taxable as “capital gain” under the Income Tax Act if the ‘initial intention’ of the assessee was to make investment. 

The bench comprising Judicial Member N.V. Vasudevan & Accountant Member Dr. A.L.Saini was held so while dismissing the revenue’s appeal. Against the impugned order of CIT (A) which in turn arises out of an order passed by the Assessing Officer under Section 147/143(3) of the Income Tax Act 1961 revenue preferred the matter before the tribunal bench. 

During the reassessment proceedings the AO asked the assessee to explain why the income found shall not be considered business income. In reply assessee stated that assessee is a NBFC Company and such shares and mutual funds were held by the assessee as investment only and hence the gain has to be treated as capital gain.

Article referred: http://www.taxscan.in/income-share-transactions-taxable-capital-gain-investment-itat/16978/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29