Capital gain – Short term capital gain or business income – A. Y. 2008-09 – Purchase and sale of shares – Entire investment in shares consistently treated as investment in shares and not stock-intrade – Transactions not of high volume – Own funds used for the purposes of investment in shares – Transactions delivery based – Income to be treated as short term capital gains and not business income

In the A. Y. 2008-09, the assessee claimed Rs. 9.25 crores as short term capital gain. The Assessing Officer held that it was business income. The Commissioner (Appeals) found that the assessee had been an investor in shares and had consistently treated her entire investment in shares as investment and not stock-intrade. The assessee was dealing in 35 scrips, involving 59 transactions for the entire year could not be considered for high volume so as to be classified as trading income. The assesee had not borrowed any funds but had used her own funds. He held the income to be treated as shortterm capital gains. The Tribunal upheld the decision of the Commissioner (Appeals).

In appeal by the Revenue, the Bombay High Court upheld the decision of the Tribunal and held as under:

“(i) T he Commissioner (Appeals) considered all the facts including the stand taken by the Revenue as found in the Assessing Officer’s order. On examination of all the facts he came to the conclusion that the activities carried out by the assesee could not be classified under the head “business income” but more appropriately as claimed by the assessee under the head “shortterm capital gains”. This was particularly so on application of the CBDT circular.

(ii) In view of the concurrent finding of fact arrived at by the Commissioner (Appeals) and the Tribunal no substantial question of law would arise.”