ITAT confirmed gain on sale of investment as capital gain
ITAT confirmed gain on sale of investment as capital gain
A search was conducted u/s 132 (of Income Tax Act, 1961) in Swastik Pipes Group of cases, and GDA Finvest & Trade Pvt Ltd was covered in the search. Notice u/s 153A (of Income Tax Act, 1961) was issued, and assessee filed return of income. Assessee had earned long and short term capital gains. AO held that STCG was a business income and assessed it accordingly. CIT(A) held it was gain on sale of investment and thus capital gain u/s 45(1) (of Income Tax Act, 1961). ITAT confirmed CIT(A)’s order.-500739
1. A search and seizure operation was initiated u/s. 132 (of Income Tax Act, 1961) in the Swastik Pipes Group of cases, and GDA Finvest & Trade Pvt Ltd was covered in the search.
2. Notice u/s 153A (of Income Tax Act, 1961) was issued, and in response, the assessee filed the return of income declaring total income of Rs. 95,34,323.
3. AO has completed the assessment at an income of Rs.99,74,084 as against returned income.
4. Assessee had earned long term capital gain- and short term capital gain.
5. AO held that short term capital gain was a business income and assessed it accordingly.
6. CIT(A) gave partial relief to the assessee.
On appeal, the ITAT held as under:
7. In the present case as is evident from the facts on record, the investments in shares were held as capital asset.
8. The assessee has accounted for these investments in shares as capital asset in its books of accounts.
9. The income arising on sale of capital asset, as stated hereinabove, has to be assessed under section 45(1) (of Income Tax Act, 1961) as capital gain and accordingly the CIT(A) was right in holding that gain arising on sale of investment will be chargeable as capital gain and not as business income.
Case Reference - DEPUTY COMMISSIONER OF INCOME TAX, VS. M/S GDA FINVEST & TRADE PVT. LTD.
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "C", NEW DELHI
BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND
SHRI O.P. KANT, ACCOUNTANT MEMBER
I.T.A. No. 2019/Del/2013
(A.Y. 2006-07)
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