Section 28, 45, 111A of Income Tax Act, 1961— In the instant case, appeal is filed by assessee against the order of CIT(A).

the assessee admitted short term capital gain and short term capital loss from sale of listed shares and also admitted short term capital gain from sale of shares u/s. 111A of the act.
Since in the assessee’s case, none of the shares were held for more than three months and most of the shares were sold within three months from the date of purchase, AO assessed the income under the head ‘business’ and completed the assessments.

Considering the frequency of buying and selling and the period of holding of shares, the AO held that the nature of the activity is that of trading in shares and not an investment in shares, therefore he held that the income arising from sale of shares, claimed by the assessee under the head capital gains, is assessable as business income and assessed accordingly.

Held that— the reasoning given by the lower authorities to assess the income under the head business is, in our view, very well justified. Further, since in this case, the business activity of the assessee is trading in shares, there can be a presumption that the amount claimed was derived through trade; in such case, the assessee has to establish that the impugned amount was indeed invested and the proceeds of sales were of a capital asset.[SHRI AMIT JAIN VERSUS THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, ERODE.] [2019] 17 ITCD Online (17) [ITAT CHENNAI]