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The Tax Publishers2012 TaxPub(DT) 2360 (Del-HC) : (2012) 048 (I) ITCL 0033 : (2012) 208 TAXMAN 0106 INCOME TAX ACT, 19761 --Head of income--Business income or capital gainsSale and purchase transaction of securities--Assessee had made purchases and sale of some securities held in his investment portfolio and held that the profit arising on such transactions was short-term capital gain. Whereas the AO contended that as assessee had earned huge profits from sale of such shares, such income was business income as motive of assessee was to earn profit from sale. Held: While applying certain tests for distinction between shares held as stock-in-trade and shares held as investment such as objective at the time of acquisition, purpose for which the sale was effected, treatment in books of accounts and frequency and regularity of transactions of purchase and sale, it was held that shares were held as investments and income on sale would be taxable as short-term capital gain. Income Tax Act, 1961, Section 14 IN THE DELHI HIGH COURT SANJIV KHANNA AND R.V. EASWAR JJ CIT v. Vinay Mittal ITA 1172/2011 27 April, 2012 Appellantby : Kamal Sawhney, Sr. standing counsel with Amit Shrivastava, Adv. Respondent by : Ajay Vohra, Ms. Kavita Jha and Somnath Shukla, Advs. JUDGMENT *Sanjiv Khanna, J: (Oral)* We have heard counsel for the parties. We frame the following substantial question of law: ''Whether the Income Tax Appellate Tribunal was right in holding that the gains from sale and purchase of various securities should be treated as long term capital gains or short term capital gains and not business income?' 2. The respondent Vinay Mittal is an individual and for the assessment year 2007-08 had filed his return of income on 31-10-2007 declaring total income of Rs. 6,00,62,080. Long term capital gains of Rs. 2,59,52,165 which was claimed as exempt and this included short term capital gains of Rs. 5,53,32,591 from sale and purchase of various securities. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 2360 (Del-HC) : (2012) 048 (I) ITCL 0033 : (2012) 208 TAXMAN 0106

INCOME TAX ACT, 19761

--Head of income--Business income or capital gainsSale and purchase transaction of securities--Assessee had made purchases and sale of some securities held in his investment portfolio and held that the profit arising on such transactions was short-term capital gain. Whereas the AO contended that as assessee had earned huge profits from sale of such shares, such income was business income as motive of assessee was to earn profit from sale. Held: While applying certain tests for distinction between shares held as stock-in-trade and shares held as investment such as objective at the time of acquisition, purpose for which the sale was effected, treatment in books of accounts and frequency and regularity of transactions of purchase and sale, it was held that shares were held as investments and income on sale would be taxable as short-term capital gain.

Income Tax Act, 1961, Section 14

IN THE DELHI HIGH COURT

SANJIV KHANNA AND R.V. EASWAR JJ

CIT v. Vinay Mittal

ITA 1172/2011

27 April, 2012

Appellantby : Kamal Sawhney, Sr. standing counsel with Amit Shrivastava, Adv.

Respondent by : Ajay Vohra, Ms. Kavita Jha and Somnath Shukla, Advs.

JUDGMENT

Sanjiv Khanna, J: (Oral)

We have heard counsel for the parties. We frame the following substantial question of law:

''Whether the Income Tax Appellate Tribunal was right in holding that the gains from sale and purchase of various securities should be treated as long term capital gains or short term capital gains and not business income?'

2. The respondent Vinay Mittal is an individual and for the assessment year 2007-08 had filed his return of income on 31-10-2007 declaring total income of Rs. 6,00,62,080. Long term capital gains of Rs. 2,59,52,165 which was claimed as exempt and this included short term capital gains of Rs. 5,53,32,591 from sale and purchase of various securities.