- (1.) 1818/Del/2000 with ITA No. 1794/Del/2001 relevant for the asst. yrs. 1996 -97 and 1997 -98.
(2.) THE assessee had purchased 95,000 shares of M/s Jai Prakash Industries Ltd. (JPIL) in 1990 -91. Subsequently, on the basis of its holding, the assessee was issued some rights shares. In 1993 -94, the assessee purchased another 20,000 shares of M/s JPIL. The shares held by the assessee were then sold by it in the previous year relevant to the assessment year that we are concerned with. On the amount received by the assessee, it claimed a sum of Rs. 23,38,928 as capital gains. The AO, however, was of the view that the entire income of Rs. 65,78,619 was required to be assessed as business income. The assessee was aggrieved by the view taken by the AO and preferred an appeal, which was allowed by the CIT(A). The Revenue then took up the matter before the Tribunal which dismissed the appeal and that is how the matter is before us under s. 260A of the IT Act, 1961.
(3.) WE are of the view that the Tribunal has not committed any error in the opinion expressed by it. The assessee held the shares as an investment and there is nothing to show that the investment was converted into stock -in -trade of the business of the assessee. In fact, the business of the assessee appears to have been that of running a restaurant. It is true that one of the objects mentioned in the memorandum of association is with respect to buying and selling of shares but that was neither the business of the assessee nor is there any material on record to show that the assessee was regularly dealing in shares. The Supreme Court in Raja Bahadur Kamakhya Narain Singh vs. CIT (1970) 77 ITR 253 (SC), took the view that the treatment given to a transaction in the books of account is of importance. As noted above, the assessee had shown its shareholding in JPIL as an investment and not a stock in trade of business. As already noted, there is nothing to show that the shares were converted into stock -in -trade.;