Capital gains

The profit arising from the sale of shares, held for more than a year, is assessable as long-term capital gains, as held by JaipurTrib in ACIT v Kavita Devi Agarwal — In favour of: The assessee (partly).

The profit arising from the purchase and sale of share transactions on the same day is to be considered as profit or loss from speculative business.

The profit and loss arising from the sale of shares, held for more than 30 days, is to be considered as a short-term capital gain or loss. However, in case the shares have been purchased or sold within 30 days, then the profit or loss arising from such purchase and sales of shares is to be considered as business income.

The shares which are being sold are to be ascertained as to whether such shares were purchased or allotted in public issue or received as bonus shares or were received shares on account of an amalgamation/merger so that the cost price can be ascertained.

Decided on:  23 September 2011.