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13. Manish Ajmera vs. ITO ITAT ‘B’ Bench, Mumbai Before Shailendra Kumar Yadav (J. M.) and Rajesh Kumar (A. M.) ITA No.5700/Mum/2013 A.Y.:2010-11. Date of Order: 26th August, 2016 Counsel for Assessee / Revenue: Jayesh Dadia / Chandra Vijay

Jagdish D. Shah
Jagdish T. Punjabi
Chartered Accountants

Section 14 – Income from transfer of shares and securities taxed under the head short term capital gains based on the Board circular.


The assessee had filed return of income declaring total income of Rs. 0.68 lakh. The AO in his order passed u/s. 143(3) assessed at Rs. 83.04 lakh and taxed Rs. 82.36 lakh as business income instead of as short term capital gains as claimed by the assessee. On appeal, the CIT (A) confirmed the AO’s order.


The Tribunal referred to a clarificatory Circular no. 6/2016 dated 29th February, 2016 wherein the Board had clarified that where the assessee himself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-in-trade, the income arising from transfer of such shares would be treated as his business income. Relying on the same, the Tribunal directed  the AO to treat the income in question as short term capital gain instead of as business income as assessed  by the AO.