INCOME – CHARGEABILITY AND COMPUTATION
SALE OF SHARES
Cumulative effect of all factors to be seen – It is Business income if in earlier years, sale of shares treated as business of assessee - Nothing on record to show that purchase of shares was for non-commercial purposes Purchase of shares not for getting controlling interest of company - Shares sold within a short period - Manner in which shares are shown in the Balance sheet is not conclusive
CIT Vs Karam Chand Thapar & Bros P. Ltd. (SC) 176 ITR 535
New Era Agencies Pvt. Ltd. Vs CIT (SC) 68 ITR 585
CIT Vs Amalgamations P. Ltd. (Mad) 108 ITR 895
Magnitude of purchase and sale of shares shows that it is business income
Raja Bahadur Visheshwara Singh & Ors. Vs CIT (SC) 41 ITR 685
Dealing in shares authorized by Article of Association of Company – Business income
Dalmia Cement ltd. Vs CIT (Pat) 12 ITR 50
Memorandum of Association of Company did not authorize purchase and sale of shares – Purchased shares to get controlling interest of company – Capital Gains arises on transfer
Kishan Prasad & Co. Ltd. Vs CIT (SC) 27 ITR 49
Purchase and sale of shares a solitary transaction – No dividend received – Capital gains arises on transfer
CIT Vs Jagarnath Prasad Chhawchharia (Pat) 176 ITR 217
Annual report of company shows investment in shares is for capital appreciation – Capital gains arises on transfer
India Nut Co. Ltd. Vs CIT (Ker) 39 ITR 234
Shares were never treated as stock-in-trade – held for earning dividend only – Transfer results in Capital Gains only
CIT Vs N.S.S. Investments (P.) Ltd. (Mad) 277 ITR 149
Vr. Kr. S. Firm Vs CIT (Mad) 61 ITR 661
It is not established that assessee was holding shares as stock-in-trade – Therefore shares held as investment – Dividend income is income from Other Sources. Holding of investments by itself is not business.
CIT Vs West Coast Electric Supplies Corporation Ltd. (Mad) 243 ITR 565.
Purchase & sale of shares in a Private Company within a short period – Adventure in the nature of trade.
V. Amirtham Ammal Vs CIT (Mad) 74 ITR 739
Burnside Investment & Holdings Ltd Vs CIT (ITAT, Mad) 61 ITD 501
Sale of shares of subsidiary company – Capital gains arises
CIT Vs Calcutta Discount Co. (P.) Ltd. ( Cal) 162 ITR 680
Shares purchased with borrowed funds – sale made not to liquidate debts and proceeds were kept in bank – Adventure in the nature of trade.
CIT Vs Sutlej Cotton Mills Supply Agency Ltd (SC) 100 ITR 706
Atlas Corporation Vs ITO (ITAT, Bom) 57 ITD 139
Neerja Birla Vs ACIT (ITAT, Mum) 66 ITD 148