While dismissing the appeal of Revenue, the Income Tax Appellate Tribunal Mumbai bench recently pronounced that the profit on sale of shares is taxable as Capital Gain under the provisions of the Income Tax Act, 1961.
The division bench was hearing an appeal filed by the revenue against the action of CIT (A) for treating the business income as capital gains. The tribunal observed that capital gain so offered by the assessee on sale of shares was treated by AO as business income.
In the instant case, the AO, after analyzing the transactions made by the appellant of purchase and sale of shares, noted that the period of holding of shares indicate that the motive is to earn profit and not capital appreciation and he treated the same as business income later the first appellate authority allowed the appeal of assessee and granted as the amount taxable under the head capital gain.
Aggrieved assessee now appeared before tribunal and the bench restored the order of CIT (A), found that the CIT (A) after applying proposition of law laid down by Bombay High Court in the case of Gopal Purohit and applying CBDT Circular No.4/2007 dated 15/06/2007 held that profit on sale of shares were liable to tax under the head Capital gains.
Finally the tribunal bench including Accountant Member R.C.Sharma and Judicial Member Amarjit Singh in their recent order ruled that profit declared by the assessee was correctly treated by CIT (A) as capital gain liable to be taxed under the head Capital Gains.
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