« From the Courts » Open DEMAT Account in 24 hrs  Karnataka High Court restrains Bengaluru-based Institute of Chartered Tax Practitioners India from enrolling candidates for its courses  Attachment on Cash Credit of Assessee under GST Act: Delhi HC directs Bank to Comply Instructions to Vacate  Income Tax Addition Made Towards Unsubstantiated Share Capital Is Eligible For Section 80-IC Deduction: Delhi High Court  Inordinate delay in income tax appeal hearings  Income Tax leviable on Tuition Fee in the Year of Rendering of Services: ITAT  Supreme Court invoked its power under Article 142 of Constitution to validate notices issued under section 148 as notices issued under section 148A. However the same shall be subject to amended provisions of section 149.  ITAT refuses to stay tax demand on former owner of Raw Pressery brand  Bombay HC sets aside rejection of refund claims by GST authorities  [Income Tax Act] Faceless Assessment Scheme does not take away right to personal hearing: Delhi High Court  Rajasthan High Court directs GST Authority to Unblock Input Tax Credit availed in Electronic Credit Ledger  Sebi-taxman fight over service tax dues reaches Supreme Court «  High Court stays recovery of income tax from CHB on... ACIT vs. Tulip Star Hotels Ltd (Supreme Court)... » CIT vs. Vinay Mittal (Delhi High Court) May, 08th 2012 Tests to determine where shares gain is capital gains or business profits   The assessee offered LTCG of Rs. 2.59 crores and STCG of Rs. 5.53 crores on sale of shares. The AO held that the LTCG & STCG were assessable as business profits on the ground that (a) the dividend was meager, (b) the assessee had undertaken risk by dealing in shares, (c) the holding period of most of the securities was very short, (d) the ratio of sales to purchases is was 1.77, (d) the sale and purchase transactions were frequent and (e) the scale of the activity of sale and purchase of securities was substantial. The CIT (A) upheld the taxability of STCG as business profits though the Tribunal deleted that as well. On appeal by the department, HELD dismissing the appeal: To determine whether an assessee is an investor in shares or a dealer in shares, a pragmatic and common sense approach has to be adopted always keeping in mind commercial considerations. The tests have been laid down in Instruction No.4/2007 dated 15.6.2007 & CIT vs. Rewashanker A. Kothari 283 ITR 338 (Guj). On facts, the Tribunal was right that the STCG was not assessable as business profits because (a) the assessee was a salaried employee, (b) He maintained two separate portfolios for investment and trading, (c) the shares were held for periods ranging from 2.4 months to 11 months, (d) though the quantum or total number shares was substantial, the transactions in question were only seven in number and the period of holding was not insignificant and small. While the quantum or total number may not be determinative but in a given case keeping in view period of holding may indicate intention to make investment, (e) substantial dividend income had been received, (f) the element of uncertainty and risk is always there in securities and this factor cannot be a determinative factor to decide whether the assessee is trading in shares or is an investor. Some investors do take risk, (g) The ratio of sales and purchase will always be in favour of sales when the sales are sold and (h) in the earlier assessment years, transactions in the investment portfolio were accepted by the AO.