Objective tests to classify shares gains as STCG vs. biz profits laid down

CIT vs. Sahara India Housing Corporation Ltd (Delhi High Court)

 

The assessee offered gains from sale and purchase of securities as “capital gains”. The AO assessed it as business profits on the ground that in the earlier years, it was offered as such. The CIT (A) & Tribunal accepted the assessee’s plea on the ground that the securities were shown as “investments” in the accounts and in the earlier years, the STCG was offered as business profits as there was no difference in the tax rate. On appeal by the department, HELD reversing the Tribunal: