Sent: Wednesday, 10 January, 2007 3:23:03 AM
Subject: [taxconsultinggroup - TONY.M.P.] 'Magnitude not to change nature of transactions''
Magnitude not to change nature of transactions'January, 10th 2007
There's good news for stock investors. ITAT has ruled that gains from stock transactions will now be classified as capital gains and be charged at 10%. The ITAT bench, comprising accounting member Pramod Kumar and Judicial Member Sushma Chowla, held that volume of transactions should not be the basis of considering such income as business income. In this case Mr Rangwalla had earned short-term capital gains amounting to Rs 1.47 crore, which was claimed to be adjusted against long-term capital loss. The assessee has also declared income from speculative gains, on account of sale and purchase of shares without the delivery of shares. The assessee had also claimed long-term capital loss of over Rs 1.02 crore. The department declined to accept the income from investment as short-term capital gains, observing that given the frequency of transactions in shares, the assessee be treated as a dealer in shares and not an investor. The ITAT held that there is no basis for treating the assessee as a trader in shares when his intention was to hold the shares in Indian companies as an investment and not as a stock in trade. "The magnitude of transactions does not change the nature of transactions, " the ITAT observed. -- This id may be used by Karnav Dave, as his id has problemDisclaimer: The mail is general information and may be the compilation of statutes, circulars, notifications and case laws. Care has been taken to make the contents of this mail error free. However, we expressly disclaim all liability of whatsoever. Information are purely an opinion and in any case it should not be construed as statement of law, and always referred relevant the Act & Rule in this regards. Since, the contents in this mail are dynamic in nature, members are advised to go in for periodical updates in their own interest. [ http://finance. groups.yahoo. com/group/ It_law_reported/ http://finance. groups.yahoo. com/group/ aaykarbhavan/ ]