Short-term gains on sale of shares related to investment could not be treated as business income

IT: Where assessee was having two clearly separate portfolios for shares i.e., investment and stock in trade, short-term gains on sale of shares related to investment could not be treated as business income
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[2014] 52 taxmann.com 365 (Delhi)
HIGH COURT OF DELHI
Commissioner of Income-tax-II
v.
M.G. Share & Stock (P.) Ltd.*
SANJIV KHANNA AND V. KAMESWAR RAO, JJ.
IT APPEAL NO. 177 OF 2014†
AUGUST  26, 2014
Section 28(i), read with section 45, of the Income-tax Act, 1961 - Business Income - Chargeable as (Business income v. Capital gains/Share dealings) - Assessment year 2006-07 - Assessee was a sub-broker and maintaining two separate portfolios in respect of shares, one as investment and other as stock-in-trade - Revenue emphasised that all shares held should be treated as stock-in-trade and income earned should be treated as business income - However; it was found that shares were not transferred from one portfolio to other; investment portfolio had shares of a few companies and transactions were infrequent while transactions in trading portfolio were of thousands of shares in 199 companies - Whether, it would not be justified to treat short term gains related to investment portfolio also as business income - Held, yes [Para 8][In favour of assessee]