THE COMMISSIONER OF INCOME vs. M/S. CS HOLDINGS PVT LTD

PDF · subscribers
TCA/131/2015HC Madras02 March 2026Bench: Honourable Dr Justice G. JAYACHANDRAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court, without adverting to the merits of the substantial questions of law raised, disposed of the Tax Case Appeal. This decision was based on the submission that the assessee had availed the Direct Tax Vivad se Vishwas Scheme 2024, and their application for settlement of tax arrears under the scheme was under process and had been entertained by the Department. Consequently, no finding was given on whether the sale of shares constituted short-term capital gains or business income, nor on the propriety of the Tribunal's finding concerning shares purchased out of borrowed capital for trading. The operative direction was to dispose of the appeal as recorded.

What were the facts?

The Commissioner of Income Tax, Chennai (appellant/revenue) filed a Tax Case Appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 20.11.2013 passed by the Income Tax Appellate Tribunal, Madras “A” Bench, Chennai. The appeal was filed against M/s. CS Holdings Private Ltd. (respondent/assessee). The dispute concerned the classification of income from the sale of shares. The High Court framed substantial questions of law. However, when the matter was taken up for final disposal, it was submitted that the assessee had availed the Direct Tax Vivad se Vishwas Scheme 2024, and the application for settlement was under process.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sale of shares is to be treated as short term capital gains and not business income, especially when the assessee had held the shares as trading assets and making profit from the initial date of acquisition? 2. Whether the finding of the Tribunal is proper, especially when the assessee has purchased shares out of borrowed capital only for the purpose of trading in shares in order to make profit out of it over and above the cost incurred on account of interest expenditure? 3. Whether on the facts and circumstances of the case, the Tribunal was right in holding that the sale of shares is to be treated as short term capital gains only? The judgment records no specific arguments made by the assessee or the revenue regarding these questions. It only states that the appeal was filed by the Department aggrieved by the Tribunal's order.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

TCA.No.131 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 02-03-2026 CORAM THE HONOURABLE DR. JUSTICE G. JAYACHANDRAN AND THE HONOURABLE MR.JUSTICE SHAMIM AHMED T.C.A.No.131 of 2015 The Commissioner of Income Tax, Chennai. … Appellant/Respondent Vs. M/s.CS Holdings Private Ltd., Sai Suraksha Second Floor, Old No.14, New No.7, Nandanam Extension, 11th Street, Nandanam, Chennai - 600 035. … Respondent/Appellant Prayer: Tax Case Appeal is filed under Section 260-A of the Income Tax Act, 1961, against the order of Income Tax Appellate Tribunal, Madras “A” Bench, Chennai, dated 20.11.2013 passed in I.T.A.No.1699/Mds/2013. For Appellant: Mr.T.Ravi Kumar Standing Counsel For Respondent: Mr.G.Logesh JUDGMENT Aggrieved by the order passed by the Income Tax Appellate Tribunal, Chennai, the Department has preferred this appeal. Page Nos.1/4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/03/2026 04:26:26 pm ) TCA.No.131 of 2015 2. This Court on considering the issue involved has framed the following Substantial Questions of Law:- “1.Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sale of shares is to be treated as short term capital gains and not business income especially when the assessee had held the shares as trading assets and making profit from the initial date of acquisition? 2.Whether the finding of the Tribunal is proper especially when the assessee has purchased shares out of borrowed capital only for the purpose of trading in shares in order to make profit out of it over and above the cost incurred on account of interest expenditure? 3.Whether on the facts and circumstances of the case, the Tribunal was right in holding that the sale of shares is to be treated as short term capital gains only?” 3. When the matter is taken up for final disposal, it is submitted that the assessee has availed tax income under the Direct Tax VIVAD SE VISHWAS Scheme 2024, and submitted Form-4 for settlement of the dispute and the Page Nos.2/4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/03/2026 04:26:26 pm ) TCA.No.131 of 2015 Department has entertained the application and the application given for full and final settlement of tax arrears under the above said scheme is under process. 4. Recording the same, without adverting to the merits of the Substantial Questions of Law raised, the Tax Case Appeal is disposed of. No costs. (G.JAYACHANDRAN, J.) (SHAMIM AHMED, J.) 02.03.2026 Internet:Yes/no Neutral Citation:Yes/No ari Page Nos.3/4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/03/2026 04:26:26 pm ) TCA.No.131 of 2015 Dr.G.JAYACHANDRAN, J. AND SHAMIM AHMED, J. ari T.C.A.No.131 of 2015 02-03-2026 Page Nos.4/4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 04/03/2026 04:26:26 pm )

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →