Income from sale of shares/securities/PMS/mutual funds taxable under head “Capital Gains”: ITAT grants relief to Hero Investment [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi bench, while granting relief to Hero Investment Pvt. Ltd., held that the income from the sale of shares, securities, PMS, and mutual funds is taxable under the head of capital gains.

The assessee, Hero Investment Pvt. Ltd., after filing the return of income, during the assessment proceedings, denied the sale of shares, securities, PMS, mutual funds, etc., as income under the head "capital gains" and treated it as business income.

Aggrieved by the order, the assessee filed an appeal before the CIT(A), who granted relief to the assessee. Therefore, the revenue filed a second appeal before the tribunal.

Before the bench, Sudhanshu Ray, counsel for the assessee, argued that the CIT(A) granted relief to the assessee after considering the entire factual position emerging from the Balance Sheet of the assessee and CBDT Circular No. 6 dated 29.02.2016. Moreover, the assessee company held the investment in group concerns for a long period. Thus, income accrued to the assessee from the sale of investments in shares, which the assessee held for a period of a thousand days, i.e., up to a maximum of 3301 days.

Krishna Kr. Mishra, counsel for the Revenue, argued that the CIT(A) granted relief to the assessee without any valid reason.

It was observed by the tribunal that income accrued to the assessee from the sale of shares of various companies that were held for a long period, with a maximum of 3301 days and a minimum of 1352 days.

After reviewing the facts and records, the single-member bench of Dr. B.R.R. Kumar (Accountant Member) and Chandra Mohan Garg (Judicial Member) held that income from the sale of shares, securities, PMS, and mutual funds is taxable under the head of capital gains, not business income.

To Read the full text of the Order CLICK HERE

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