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