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The Commissioner of Income Vs M/S. Cs Holdings Pvt. Ltd. — Income Tax | Madras HC (2026)

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Madras HC
2026
The Commissioner of Income Vs M/S. Cs Holdings Pvt. The Commissioner of Income v. M/S. Cs Holdings Pvt. Ltd.

Disposed¶36

The Commissioner of Income v. M/S. Cs Holdings Pvt. Ltd.

Madras HC2 Mar 2026TCA/131/2015

Case brief

AI extract

What is this about?

T.C.A.No.131 of 2015; High Court of Judicature at Madras; decided 02-03-2026; appellant: The Commissioner of Income Tax, Chennai (T.Ravi Kumar, Standing Counsel); respondent/assessee: M/s. CS Holdings Private Ltd., Nandanam, Chennai (G.Logesh); impugned order: ITAT Madras 'A' Bench, Chennai, dated 20.11.2013 in I.T.A.No.1699/Mds/2013; appeal under Section 260-A of the Income Tax Act, 1961; substantial questions: sale of shares as short term capital gains versus business income; shares held as trading assets; profit from initial date of acquisition; shares purchased out of borrowed capital for trading; profit over and above interest expenditure; appeal disposed of without adverting to merits as assessee availed Direct Tax VIVAD SE VISHWAS Scheme 2024 (Form-4 submitted, settlement of tax arrears under process); no costs; bench: Dr. G. Jayachandran J. and Shamim Ahmed J.

What did the court decide?

Recording that the assessee availed the Direct Tax VIVAD SE VISHWAS Scheme 2024 and its full and final settlement of tax arrears is under process, the Court disposed of the Tax Case Appeal without adverting to the merits of the Substantial Questions of Law raised, imposing no costs.

What the court decided

AI extract

Outcome

Disposed

Issue for consideration

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 made profit from the initial date of acquisition. +2 more

Ratio / Principle

Recording that the assessee availed the Direct Tax VIVAD SE VISHWAS Scheme 2024 and its full and final settlement of tax arrears is under process, the Court disposed of the Tax Case Appeal without adverting to the merits of the Substantial Questions of Law raised, imposing no costs.

Detailed headnote1 paragraphs

Madras High Court, T.C.A.No.131 of 2015 (Dr. G. Jayachandran & Shamim Ahmed, JJ.), decided 02-03-2026: Tax Case Appeal under Section 260-A of the Income Tax Act, 1961 by the Commissioner of Income Tax, Chennai against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai dated 20.11.2013 in I.T.A.No.1699/Mds/2013, concerning whether sale of shares held by the assessee (M/s. CS Holdings Private Ltd.) as trading assets, purchased out of borrowed capital for trading, is to be assessed as short term capital gains or business income. Three Substantial Questions of Law were framed on this characterisation. At final disposal it was reported that the assessee availed the Direct Tax VIVAD SE VISHWAS Scheme 2024, submitted Form-4, and the Department entertained the application with full and final settlement of tax arrears under process. Recording this, the Court disposed of the appeal without adverting to the merits of the Substantial Questions of Law; no costs.

A

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.

M/s.CS Holdings Private Ltd., Sai Suraksha Second Floor, Old No.14, New No.7, Nandanam Extension, 11^th Street, Nandanam, Chennai - 600 035.

… Appellant/Respondent Vs.

… 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

TCA.No.131 of 2015

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?”

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

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.

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

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

Issues for consideration

3 issues framed by the court

AI extract

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 made profit from the initial date of acquisition.¶23
2.
Whether the finding of the Tribunal is proper, especially when the assessee purchased shares out of borrowed capital only for the purpose of trading in shares in order to make profit over and above the cost incurred on account of interest expenditure.¶25
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.¶27

Statutes considered

2 provisions across 2 enactments

AI extract

Income Tax Act, 1961260-A¶12
Direct Tax VIVAD SE VISHWAS Scheme 2024Direct Tax VIVAD SE VISHWAS Scheme 2024¶29

Procedural history

How this case reached the court

AI extract

Order under challenge
Order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 20.11.2013, passed in I.T.A.No.1699/Mds/2013, challenged by the Department through this Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961.¶12
Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai · 20.11.2013
Prior proceeding
The assessee's dispute was decided by the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai in I.T.A.No.1699/Mds/2013 (order dated 20.11.2013), against which the Department preferred this appeal.¶12
Prior proceeding
This Court framed three Substantial Questions of Law on whether gains from sale of shares held by the assessee as trading assets (purchased out of borrowed capital for trading) constitute short term capital gains or business income.¶20
Prior proceeding
Before final disposal it was submitted that the assessee availed the Direct Tax VIVAD SE VISHWAS Scheme 2024 and submitted Form-4 for settlement of the dispute; the Department entertained the application and full and final settlement of tax arrears under the scheme is under process.¶34

Parties & counsel

AI extract

appellant
The Commissioner of Income Tax, Chennai.¶7
T.Ravi Kumar
respondent
M/s.CS Holdings Private Ltd., Sai Suraksha Second Floor, Old No.14, New No.7, Nandanam Extension, 11th Street, Nandanam, Chennai - 600 035.¶8
G.Logesh

Coram

AI extract

Dr. Justice G. Jayachandranmember¶5
Mr. Justice Shamim Ahmedmember¶5

Case details

As recorded by the court registry

Court: Madras HC
Decided on: 2 Mar 2026 · March
Registered: 10 Mar 2015
Case no.: TCA/131/2015
CNR: HCMA010500062015
Topic: Income Tax
Bench: G. Jayachandran Shamim Ahmed
Disposal: DISPOSED OF
Case type: T.C.A.

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Cite this judgement

The Commissioner of Income v. M/S. Cs Holdings Pvt. Ltd., TCA/131/2015 (MAD), decided on 2 March 2026.

The Madras High Court publishes no neutral citation for this judgement — cite it by case number and date of decision.

Statutes2

Income Tax Act, 1961260-A
Direct Tax VIVAD SE VISHWAS Scheme 2024Direct Tax VIVAD SE VISHWAS Scheme 2024

View all statutes

Procedural history4

Order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 20.11.2013, passed in I.T.A.No.1699/Mds/2013, challenged by the Department through this Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961.Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai · 20.11.2013
The assessee's dispute was decided by the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai in I.T.A.No.1699/Mds/2013 (order dated 20.11.2013), against which the Department preferred this appeal.
This Court framed three Substantial Questions of Law on whether gains from sale of shares held by the assessee as trading assets (purchased out of borrowed capital for trading) constitute short term capital gains or business income.

View full history

Bench / Coram

Dr. Justice G. Jayachandran and Mr. Justice Shamim Ahmed

Parties & counsel