1.   COMMISSIONER OF INCOME TAX versus M/S. DHINGRA METAL WORKS, ITA  No. 1111/2010 decided on 4th October, 2010 (Delhi High Court).

That the material collected and the statement recorded during the survey is not a conclusive piece of evidence by itself. 

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2.   COMMISSIONER OF INCOME TAX versus PNB FINANCE & INDUSTRIES LTD. ITA  No. 306/2010 pronounced on 18th October, 2010 (Delhi High Court).

That the assessee-respondent is a company engaged in the business of sale and purchase of shares. It filed its return declaring an income of Rs.60,05,375/- in which it included short term capital gain at Rs.38,476/- and long term capital gain at NIL after set-off of long term capital loss of previous years amounting to Rs.2,08,24,174/-, but the AO disallowed the claim of long term capital loss and assessed the income under the head PGBP. Central Board of Direct Taxes (CBDT) on 15th June, 2007 issued the circular. In the said circular, the CBDT dealt with the shares held as stock-in-trade and investments and what should be the test for such a distinction. And gave the following guidelines:

“CBDT wishes to emphasise that it is possible for a taxpayer to have two portfolios, i.e., an investment portfolio comprising of securities which are to be treated as capital assets and a trading portfolio comprising of stock-in-trade which are to be treated as trading assets. Where an assessee has two portfolios, the assessee may have income under both heads, i.e., capital gains as well as business income.  Assessing Officers are advised that the above principles should guide them in determining whether, in a given case, the shares are held by the assessee as investment (and therefore giving rise to capital gains) or as stock-in-trade (and therefore giving rise to business profits). The Assessing Officers are further advised that no single principle would be decisive and the total effect of all the principles should be considered to determine whether, in a given case, the shares are held by the assessee as investment or stock-in-trade.”

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