Not a business activity – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/business-laws/not-a-business-activity/article36813151.ece

PORTRAIT

A single transaction of buying and selling shares does not constitute a business activity, the Chennai bench of the Income Tax Appellate Tribunal (ITAT) has said. The income tax assessee had purchased and sold 1.25 lakh shares of ING Vysya Bank in 2009. He declared the transaction as an investment and accordingly claimed capital gain while filing his IT return.

To this, the ITAT said, “It has to be seen the total activities of the assessee i.e., whether the assessee is buying some shares, selling them again and purchasing the same if the activity is continued activity, buying and selling it may be inferred that the assessee’s intention is to do business in shares. In this case, the single transaction has been done by the assessee. In our view, the activity carried by the assessee i.e., buying and purchase of shares of ING Vysya Bank is an investment, not a business activity. “Accordingly, we reverse the order passed by the CIT(A), and the appeal filed by the assessee is allowed.”

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