Business Income or Capital Gains Urgent Sir!!

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Rajesh (Querist)
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24 July 2010 Dear Experts,
One of our client has income by way of selling shares. All the shares traded have been only on delivery basis. No derivative transaction has taken place. In such a case whether it is better to show it as Business Income or Capital Gains.
But last year it has been assessed as Business Income.
With regards,
Rajesh

srinath

srinath (Expert)
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24 July 2010 if it was assessed as business income last year and the volume of transaction is huge then it is better to treat it as business income in the current year

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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24 July 2010 There is no hard and fast rules to distinguish whether share transaction is business income or capital gains. May be judged how a common man view the issue considering the following situations.
The period of holding, the frequency of transactions, the motive of the transactions, the entries in the books, the infrastructure deployed , nature of systems monitoring, the source of funds etc.

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Ca Aashish Upadhyay

Ca Aashish Upadhyay (Expert)
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24 July 2010 In my opinion We should be careful in distinguishing the Business and Capital Gain aspect. As in then case of Business Income we may be asked to prove the sources of Investment of the clients and in the above case it seems that the Investment is solely related to the Individual.
Hence it is always good to show under CG rather in PGBP.

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