Indl. Development Co. (P) Ltd., 82 ITR 588 (SC). (ii). CIT v. H. Holck Larsen

288 ITR 641Reported decision2007#2896 most cited

What is Indl. Development Co. (P) Ltd., 82 ITR 588 (SC). (ii). CIT v. H. Holck Larsen authority for?

This AAR ruling provides guiding principles for distinguishing between shares held as stock-in-trade and those held as investments. It clarifies that the power to trade in shares in the memorandum of association is not decisive, and the nature of the transaction is determined by factors like the substantial nature of transactions, accounting methods, magnitude of trades, and holding period.

41

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2010 to 2025.

Also referred to as

CIT v. H. Holck Larsen · 288 ITR 641 · Authority for Advance Rulings · AAR · shares stock-in-trade or investment · business income capital gains distinction · nature of share transaction · MOA power to trade shares · factors for classification of shares · section 2(14) · period of holding shares

Issues it is cited on

period of holdingsection 2(14)short term capital gainsshort term capital gainsection 36(1)(iii)section 40(a)section 36(1)section 37(1)section 36long term capital gainsection 37section 14a

Judgments citing Indl. Development Co. (P) Ltd., 82 ITR 588 (SC). (ii). CIT v. H. Holck Larsen

MARUTI SUZUKI INDIA LTD.,NEW DELHI vs. DCIT, NEW DELHI

In the result, all the three appeals of the assessee are allowed as indicated above and the appeal of Revenue is partly allowed

ITA 901/DEL/2017[2012-13]Status: DisposedITAT Delhi08 Oct 2025AY 2012-13

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 32Section 35Section 43B

…n the nature of investment was a question of law. This was a mixed question of law and fact. 7. The principles laid down by the Supreme Court in the above two cases afford adequate guidance to the assessing officers 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles:- (i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transacti…

DCIT, NEW DELHI vs. M/S. MARUTI SUZUKI INDIA LTD., NEW DELHI

In the result, all the three appeals of the assessee are allowed as indicated above and the appeal of Revenue is partly allowed

ITA 1024/DEL/2016[2011-12]Status: DisposedITAT Delhi08 Oct 2025AY 2011-12

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 32Section 35Section 43B

…n the nature of investment was a question of law. This was a mixed question of law and fact. 7. The principles laid down by the Supreme Court in the above two cases afford adequate guidance to the assessing officers 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles:- (i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transacti…

DCIT CIRCLE 13(2)(2), MUMBAI vs. NANDANBALA COMMERCIALS PRIVATE LIMITED , MUMBAI

In the result, the appeal filed by the revenue is dismissed and cross objection filed by the assesse is also dismissed

ITA 1134/MUM/2023[2016-17]Status: DisposedITAT Mumbai29 Jan 2024AY 2016-17

Bench: Shri Aby T Varkey & Shri Amarjit Singhdy. Commissioner Of Vs. Nandanbala Commercials Income Tax Circle 13(2)(2) Private Limited Room No. 452, 4 Th Floor, (Formerly Known As Sanjay Infraspace Limited) Aayakar Bhavan, 1401-A, Wing One Bkc, M.K. Road, Plot No. C-66, G-Block, Mumbai – 400020 Bkc, Bandra-East Mumbai -400 092 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aavcs1575L Appellant .. Respondent

For Appellant: Madhur AgarwalFor Respondent: HM Bhatt
Section 143(2)Section 36(1)(ii)

…ual Funds also. c) The CBDT Circular No. 4/2007 dated 15.06.2007 has been discussed in various judicial pronouncements to determine whether a particular item is a Capital asset or Stock in Trade. Reference is made to a decision of Authority of Advance Ruling (288 ITR 641) where in referring to judgements of Hon'ble Apex Courts in several cases, it has culled out the following principles. "(i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of…

ACIT, CIRCLE- 26(2), DELHI vs. VIC ENTERPRISES PVT. LTD., NEW DELHI

In the result, appeal of the Revenue is dismissed

ITA 7103/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Jan 2023AY 2014-15

Bench: N.K. Billaiya & Ms. Astha Chandraasstt. Year: 2014-15

For Appellant: Shri M.P. Rastogi, CAFor Respondent: Shri Vivek Vardhan, Sr. DR
Section 10(38)Section 143(1)Section 143(3)Section 2(14)

…lumes o f the transactions suggest that it was not a case of investment but business. The assessee has converted stock in trade to investments. He placed reliance on the decision of the Authority for Advance Ruling in the case o f Fidelity 7 Group reported in 288 ITR 641 (AAR) . He submitted that where a company purchases and sells shares, it must be shown that they were held as stock in trade and that existence of the power to purchase and sell shares in the Memorandum of Association is not of decisive o f the nature o f transaction. He submitted that the substantial nature of transactions, the manner of maintai…

M/S. INDI STOCK PRIVATE LIMITED vs. COMMISSIONER OF INCOME TAX, KOLKATA- II

In the result, the appeal filed by the assessee is allowed and

ITA/49/2009HC Calcutta30 Sept 2022

Bench: HON'BLE JUSTICE T. S. SIVAGNANAM,HON'BLE JUSTICE SUPRATIM BHATTACHARYA

Section 143(3)Section 260A

…he decision of the Hon’ble Supreme Court in Commissioner of Income Tax, (Central), Calcutta Versus Associated Industrial Development Company Private Limited 1, and the decision in H. Holck Larsen and the decision of the Authority for Advance Ruling (AAR), 288 ITR 641-AAR wherein 3 principles have been carved out and dealt with by the AAR. After taking note of the aforementioned decisions, the CBDT emphasized that it is possible for the 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 stoc…

M/S. GAYAN TRADERS LIMITED vs. COMMISSIONER OF INCOME TAX, KOLKATA-II

In the result, the appeal filed by the assessee is allowed and the

ITA/48/2009HC Calcutta30 Sept 2022

Bench: HON'BLE JUSTICE T. S. SIVAGNANAM,HON'BLE JUSTICE SUPRATIM BHATTACHARYA

Section 143(3)Section 260A

…he decision of the Hon’ble Supreme Court in Commissioner of Income Tax, (Central), Calcutta Versus Associated Industrial Development Company Private Limited 8, and the decision in H. Holck Larsen and the decision of the Authority for Advance Ruling (AAR), 288 ITR 641-AAR wherein 3 principles have been carved out and dealt with by the AAR. After taking note of the aforementioned decisions, the CBDT emphasized that it is possible for the 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-…

DCIT, CIR-36, KOLKATA, KOLKATA vs. SMT YAMINI KHANDELWAL, KOLKATA

In the result, appeals of both the assessee are partly allowed and appeals of the revenue are dismissed

ITA 613/KOL/2015[2010-2011]Status: DisposedITAT Kolkata27 Sept 2022AY 2010-2011

Bench: Shri Rajpal Yadav, Hon’Ble & Shri Girish Agrawal, Hon’Bleassessment Year: 2010-11 Smt. Yamini Khandelwal Asst. Commissioner Of Income 5, Amratolla Street Vs Tax, Circle-36, Kolkata Kolkata - 700001 Pan: Afupk6167K अपीलाथ"/ (Appellant) "" यथ"/ (Respondent)

For Appellant: Shri J.M. Thard, AdvocateFor Respondent: Shri Biswanath Das, Sr. D/R
Section 14A

…the nature of investment was a question of law. This was a mixed question of law and fact." 7. The principles laid down by the Supreme Court in the above two cases afford adequate guidance to the assessing officers. 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles :- "(i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transac…

YAMINI KHANDEL WAL,KOLKATA vs. ACIT, CIR-36, KOLKATA, KOLKATA

In the result, appeals of both the assessee are partly allowed and appeals of the revenue are dismissed

ITA 425/KOL/2015[2010-2011]Status: DisposedITAT Kolkata27 Sept 2022AY 2010-2011

Bench: Shri Rajpal Yadav, Hon’Ble & Shri Girish Agrawal, Hon’Bleassessment Year: 2010-11 Smt. Yamini Khandelwal Asst. Commissioner Of Income 5, Amratolla Street Vs Tax, Circle-36, Kolkata Kolkata - 700001 Pan: Afupk6167K अपीलाथ"/ (Appellant) "" यथ"/ (Respondent)

For Appellant: Shri J.M. Thard, AdvocateFor Respondent: Shri Biswanath Das, Sr. D/R
Section 14A

…the nature of investment was a question of law. This was a mixed question of law and fact." 7. The principles laid down by the Supreme Court in the above two cases afford adequate guidance to the assessing officers. 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles :- "(i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transac…

DCIT, CIR-36, KOLKATA, KOLKATA vs. SHRI SURAJ KHANDEL, KOLKATA

In the result, appeals of both the assessee are partly allowed and appeals of the revenue are dismissed

ITA 1105/KOL/2015[2010-2011]Status: DisposedITAT Kolkata27 Sept 2022AY 2010-2011

Bench: Shri Rajpal Yadav, Hon’Ble & Shri Girish Agrawal, Hon’Bleassessment Year: 2010-11 Smt. Yamini Khandelwal Asst. Commissioner Of Income 5, Amratolla Street Vs Tax, Circle-36, Kolkata Kolkata - 700001 Pan: Afupk6167K अपीलाथ"/ (Appellant) "" यथ"/ (Respondent)

For Appellant: Shri J.M. Thard, AdvocateFor Respondent: Shri Biswanath Das, Sr. D/R
Section 14A

…the nature of investment was a question of law. This was a mixed question of law and fact." 7. The principles laid down by the Supreme Court in the above two cases afford adequate guidance to the assessing officers. 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles :- "(i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transac…

SURAJ KHANDELWAL,KOLKATA vs. JCIT, RG-36, KOLKATA, KOLKATA

In the result, appeals of both the assessee are partly allowed and appeals of the revenue are dismissed

ITA 1069/KOL/2015[2010-2011]Status: DisposedITAT Kolkata27 Sept 2022AY 2010-2011

Bench: Shri Rajpal Yadav, Hon’Ble & Shri Girish Agrawal, Hon’Bleassessment Year: 2010-11 Smt. Yamini Khandelwal Asst. Commissioner Of Income 5, Amratolla Street Vs Tax, Circle-36, Kolkata Kolkata - 700001 Pan: Afupk6167K अपीलाथ"/ (Appellant) "" यथ"/ (Respondent)

For Appellant: Shri J.M. Thard, AdvocateFor Respondent: Shri Biswanath Das, Sr. D/R
Section 14A

…the nature of investment was a question of law. This was a mixed question of law and fact." 7. The principles laid down by the Supreme Court in the above two cases afford adequate guidance to the assessing officers. 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles :- "(i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transac…

JET AGE SECURITIES PRIVATE LIMITED vs. COMMISSIONER OF INCOME TAX, KOLKATA-III

In the result, the appeal filed by the assessee is allowed and the

ITA/79/2010HC Calcutta15 Sept 2022

Bench: HON'BLE JUSTICE T. S. SIVAGNANAM,HON'BLE JUSTICE SUPRATIM BHATTACHARYA

Section 260ASection 94(7)

…volume of transactions, transacted by the assessee would not alter the nature of transactions. The tribunal also agreed that in the preceding years, the assessee had earned income from 1 (2007) 288 ITR 641 2 193 ITR 321 ITA NO. 79 OF 2010 Page 7 of 12 long term capital gains and short term capital gains which has been consistently accepted by the department. The assessee had therefore contended that for the assessment year under consideration, the same approach has to be maintained as the principle of consistency has to be applied. To…

M/S UNICORN AGRO TECH LIMITED, SECUNDERABAD. vs. THE ASST. COMMISISONER OF INCOME TAX, HYDERABAD.

In the result, the appeal filed by the assessee is allowed and the

ITTA/48/2009HC Telangana16 Mar 2021

Bench: T.VINOD KUMAR,M.S.RAMACHANDRA RAO

Section 143(3)Section 260A

…he decision of the Hon’ble Supreme Court in Commissioner of Income Tax, (Central), Calcutta Versus Associated Industrial Development Company Private Limited 8, and the decision in H. Holck Larsen and the decision of the Authority for Advance Ruling (AAR), 288 ITR 641-AAR wherein 3 principles have been carved out and dealt with by the AAR. After taking note of the aforementioned decisions, the CBDT emphasized that it is possible for the 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-…

ACIT, NEW DELHI vs. M/S. VIC ENTERPRISES PVT. LTD., NEW DELHI

In the result, the appeal of the revenue is dismissed

ITA 1893/DEL/2017[2011-12]Status: DisposedITAT Delhi07 Feb 2020AY 2011-12

Bench: Sh. N. K. Choudharydr. B. R. R. Kumarita No. 1893/Del/2017 : Asstt. Year : 2011-12 Assistant Commissioner Of Vs M/S Vic Enterprises Pvt. Ltd., 4Th Floor, Punjabi Bhawan, 10, Income Tax, Circle-26(1), New Delhi-110002 Rouse Avenue, New Delhi (Appellant) (Respondent) Pan No. Aaacv0132B Assessee By : Sh. M. P. Rastogi, Adv. Revenue By : Sh. H. K. Choudhary, Cit Dr Date Of Hearing: 06.02.2020 Date Of Pronouncement: 07.02.2020

For Appellant: Sh. M. P. Rastogi, AdvFor Respondent: Sh. H. K. Choudhary, CIT DR
Section 10(38)Section 143(3)Section 14A

…volumes of the transactions suggest that it was not a case of investment but business. The assessee has converted stock in trade to investments. He placed reliance on the decision of the Authority for Advance Ruling in the case of Fidelity 7 Group reported in 288 ITR 641 (AAR). He submitted that where a company purchases and sells shares, it must be shown that they were held as stock in trade and that existence of the power to purchase and sell shares in the Memorandum of Association is not of decisive of the nature of transaction. He submitted that the substantial nature of transactions, the manner of maintainin…

ADIT, NEW DELHI vs. MS. ASHA KUMAR AGGARWAL, NEW DELHI

In the result, the appeal filed the Revenue is dismissed

ITA 1340/DEL/2012[2008-09]Status: DisposedITAT Delhi08 Mar 2019AY 2008-09

Bench: Shri H.S. Sidhu & Shri O.P. Kantassessment Year: 2008-09 Adit, Vs. Ms. Asha Kumar Aggarwal, Circle-1(1) (Intl. Taxation), E-335, East Of Kailash, New New Delhi Delhi Pan :Adcpa4605J (Appellant) (Respondent) Appellant By Shri C.P. Singh, Sr. Dr Respondent By Shri R.S. Ahuja, Ca

Section 143(2)

…d valued at cost. It was also contended that the intention of the assessee should be read from its conduct and not on the basis of assumptions. The appellant placed reliance on the following decisions: • H Hoick Larsen v. CIT (1972) 160 ITR 67 (Bom) 3 • AAR (288 ITR 641) • CIT v. Gopal Purohit-ITA No. 1121/09 dated 6.01.2010 • J.M. Stock Broking v JCIT )ITAT Mumbai) • DC IT v SMK Shares and Stock Broking • Shri Janak S. Rangwalla v ACIT ITA No. 1163/Mum/2004 • Fidelity Northstar Fund • CIT v PNB Finance Ltd. 2.1 The assessee in support of the above claim relied on the decisions of the Hon’ble Bombay High Court i…

M/S ECHOLAC VINMAY (P) LTD.,KOLKATA vs. ITO, WD-9(2), KOLKATA, KOLKATA

In the result, the appeal of assessee is dismissed

ITA 370/KOL/2016[2010-2011]Status: DisposedITAT Kolkata28 Sept 2018AY 2010-2011
For Appellant: Shri Rajeeva Kumar, Advocate, ld.ARFor Respondent: Shri S. Dasgupta, Addl.CIT, ld. DR
Section 143(3)

…s of granting loans and advances. The assessee undisputedly had made 'Investment' in shares in the year 2008­09. The same is also evident from the Balance Sheet of the assessee. The Authority for Advance Rulings in the case of Fidelity North Star Fund & Ors (288 ITR 641) held that whether the acquisition of securities is for business purpose or by way of investment can be decided with reference to the intention of the purchaser at the time of acquisition of security itself For this purpose the authority held that entries made in the books of accounts are relevant because in case of purchase of securities for bus…

G2 CORPORATE SERVICES LLP, (FORMERLY M/S. G2 CORPORATE SERVICES LTD), SEC'BAD,HYDERABAD vs. DCIT, CIRCLE-2(3), HYDERABAD, HYDERABAD

In the result, both the appeals of assessee are partly allowed

ITA 833/HYD/2016[2009-10]Status: DisposedITAT Hyderabad08 Jun 2018AY 2009-10

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiah

For Appellant: Shri K.A. Sai Prasad, ARFor Respondent: Shri M. Sitaram, DR
Section 143(1)(a)Section 143(3)Section 14A

…nce of conduct and dealings by the acquirer with the commodity. " 5. The Assessing Officer relied upon the circular 4/2007 dt 15.06.2007 of CBDT (copy placed at pages 173 & 174) and quoted the following therefrom: 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles: "(i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transact…

G2 CORPORATE SERVICES LLP, (FORMERLY M/S. G2 CORPORATE SERVICES LTD), SEC'BAD,HYDERABAD vs. DCIT, CIRCLE-2(3), HYDERABAD, HYDERABAD

In the result, both the appeals of assessee are partly allowed

ITA 832/HYD/2016[2009-10]Status: DisposedITAT Hyderabad08 Jun 2018AY 2009-10

Bench: Smt. P. Madhavi Devi & Shri B. Ramakotaiah

For Appellant: Shri K.A. Sai Prasad, ARFor Respondent: Shri M. Sitaram, DR
Section 143(1)(a)Section 143(3)Section 14A

…nce of conduct and dealings by the acquirer with the commodity. " 5. The Assessing Officer relied upon the circular 4/2007 dt 15.06.2007 of CBDT (copy placed at pages 173 & 174) and quoted the following therefrom: 8. The Authority for Advance Rulings (AAR) (288 ITR 641), referring to the decisions of the Supreme Court in several cases, has culled out the following principles: "(i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transact…

SH. RAKESH KUMAR GUPTA,NEW DELHI vs. ITO, NEW DELHI

In the result, the appeal is dismissed

ITA 5845/DEL/2014[2010-11]Status: DisposedITAT Delhi09 Oct 2017AY 2010-11

Bench: : Shri H.S. Sidhu & Shri L.P. Sahu

Section 133(6)

…nature of investment was a question of law. This is a mixed question of law and fact. 7. The principles laid down by the Supreme Court in the above two cases afford adequate guidance to the Assessing Officers. 8. The Authority for Advance Rulings (AAR) [2007] 288 ITR 641 , referring to the decisions of the Supreme Court in several cases, has culled out the following principles (page 651) : (i) Where a company purchases and sells shares, it must be shown that they were held as stock-in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature o…

M/S. EASTMAN INDUSTRIES LTD.,NEW DELHI vs. ACIT, NEW DELHI

In the result, the appeal of the assessee is allowed for statistical purpose and that of Revenue is partly allowed for statistical purposes

ITA 286/DEL/2013[2008-09]Status: DisposedITAT Delhi09 Jun 2017AY 2008-09

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: 1. (a) That the Learned CIT(A) has erred in sustaining the disallowance under se
Section 14ASection 28Section 37(1)

…the capital gains as business income has relied on the following decisions : (i). CIT(Central) v. Associated Indl. Development Co. (P) Ltd., 82 ITR 588 (SC). (ii). CIT vs. H. Holck Larsen, 160 ITR 67 (SC) (iii). Authority for Advance Ruling in Fidelity Group, 288 ITR 641. (iv). CIT vs. P. Manonmani, 245 ITR 48 (Mad). (v). CIT vs. JH Gotla MANU/SC/0126/1985 The assessee carried the matter in appeal before the ld. CIT(A), who after considering the detailed submissions, facts of the case and various decisions, directed the Assessing Officer to treat the surplus received on sale and purchase of shares as short term c…

DCIT, CIRCLE - 10, KOLKATA, KOLKATA vs. M/S. VEDA COMMERCIAL PVT. LTD., KOLKATA

Appeal is partly allowed for statistical purposes

ITA 1527/KOL/2010[2007-08]Status: DisposedITAT Kolkata16 Nov 2016AY 2007-08

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri Subash Agarwal, AdvocateFor Respondent: Shri Rabin Chaudhury, JCIT
Section 143(3)Section 14A

…cepting the treatment of the assessee. 5.8.4. We find that CBDT Circular No. 4/2007 dated 15.6.2007 on the impugned subject had in para 8 stated as below:- 8. The Authority for Advance Rulings (AAR) in Fidelity Northstar Fund& Ors ., IN RE reported in (2007) 288 ITR 641 , referring to the decisions of the Supreme Court in several cases, has culled out the following principles : (i)”Where as company purchases and sells shares, it must be shown that they were held as stock –in-trade and that existence of the power to purchase and sell shares in the memorandum of association is not decisive of the nature of transac…

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