Capital gains

 

 Gains arising from the purchase and sale of shares held for 30 days or less is assessable as short-term capital gains and not business profits, as held by MumTrib in Hitesh Satishchandra Doshi and Anr v JCIT — In favour of: The assessee; ITA Nos 6497, 6603, 6495/Mum/2009 and CO No 239/Mum/2009 in ITA No 3231/Mum/2009: (AYs 2003–2004, 2004–2005, 2006–2007).

Decided on: 15 June 2011.

Income arising from the purchase and sale of shares held by the assessee as investment cannot be treated as business income.

An investor is allowed to reshuffle his portfolio within a short period in order to reduce the risk of loss of capital or income.

Derivative transaction — The derivate transactions, entered into by the assessee at the recognised stock exchanges even prior to the date of notification in the relevant previous year, are to be treated as being covered by the exclusion clause set out in s 43(5)(d).