Sec. 45 of the Income-tax Act, 1961—Capital gain – Revenue filed Tax Appeal against the order of ITAT directing the AO to treat the profit arising on the frequent and voluminous transactions initiated with borrowed funds in shares as 'Long Term Capital Gain' instead of 'Business Income and; In directing the AO to treat the notional loss incurred on Futures & Option transaction as normal business loss. High Court dismissed the Tax Appeal of the revenue holding that “Circular issued by the Department with regard to the issue of taxability of surplus on sale of shares and securities, it has clarified therein that with a view to reduce litigation and uncertainty in the matter of taxability, as long term capital gains or business income, the assess has an option to treat the income from sale of listed shares and securities as income arising under the head 'Long Term Capital Gains', them the same shall be accepted by the assessing officer. However, the stand once taken by the assessee would not be subject to change and consistently the income on the sale of securities which are held as investment would continue to be taxed as long capital gains or business income as opted by the Assessee. The circular makes no distinction whether the investments made in shares were out of borrowed funds or out of its own funds. Thus, Revenue cannot override the above CBDT Circular, which is binding upon it“. SLP of the Revenue dismissed as withdrawn on account of law tax effect. - PR. CIT V/s HARDIK BHARAT PATEL - [2020] 269 TAXMAN 562 (SC)