Borrowed mount invested in shares is irrelevant in determining whether income is a business income or capital gain income

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Borrowed mount invested in shares is irrelevant in determining whether income is a business income or capital gain income 

PCIT vs. Hardik Bharat Patel (Bombay High Court)
Capital Gains vs. Business Profits: As per CBDT Circular No. 6 of 2016 dated 29.2.2016 gains on shares held for more than 12 months are treated as long-term capital gains and not as business profits.
The fact that the amount invested in shares were out of borrowed funds and there were frequent and voluminous transactions is irrelevant
Our attention is drawn to Circular No. 6 of 2016 dated 29.2.2016 issued by the Central Board of Direct Taxes (CBDT). This circular issued with regard to the issue of taxability of surplus on sale of shares and securities, – whether as capital gain or business income in case of long term holdings of shares and securities i.e in excess of 12 months. It has clarified therein that with a view to reduce litigation and uncertainty in the matter of taxibility, as long term capital gains or business income – the assess has an option to treat the income from sale of listed shares and securities as income arising under the head ‘Long Term Capital Gains’, them the same shall be accepted by the assessing officer

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