Central Board of Direct Taxes (CBDT) has expressed its disappointment on a newspaper report based upon the opinion of a tax consultant.CBDT officials said the statement that the investor would "have to live at the mercy of the tax officials" is totally incorrect and inappropriate."Whether a person buying and selling shares/securities is a trader or an investor is a question of fact. In 1989, guidelines were issued for the guidance of assessing officers. Since then, there have been a number of judgements of the courts. "Culling out the principles from these judgements, the guidelines were updated and a draft circular was posted on the website a few days ago. Nevertheless, the question whether a person purchasing and selling shares/securities is a trader or an investor remains a question of fact. The Assessing Officer would have to take note of the totality of the facts and circumstances before reaching a conclusion. "This position has been made clear in paragraph 10 of the 1989 circular and in the last paragraph of the present draft circular. "The draft circular does not refer to FIIs at all. Nor does it purport to deal with any case or class of cases. The draft circular was put out to provide greater clarity for the guidance of assessing officers. CBDT rejects the opinion of tax consultants that the draft instructions are "ambiguous".
