Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 977 - AT - Income TaxBad debts or business loss – Held that:- The assessee miserably failed to prove that the present transaction was in the nature of a `business transaction' - The amount given as advance was never given with the intention of doing any business in "real estate". The assessee never intended to carry on such business of real estate - This solitary transaction of paying Rs.37.50 lakh to M/s.ZEPL was with the object or making an "Investment" and the non-receipt of refund of Rs.15 lakh out of such transaction cannot be characterized as anything but a loss of capital nature – Following Bengal & Assam Investors Ltd. VS. CIT [1965 (11) TMI 31 - SUPREME Court] - The object clause in M/A is not decisive because question is not what business company professes to carry on but what business it actually carries on – Decided against assessee. Sale of shares – Business income or capital gain - Held that:- The assessee valued such shares at cost price in the respective balance-sheets from the date of purchase - If these shares had been treated as "stock-in-trade", then these would have been valued at `Cost or market price, whichever is less' - The fact that the mistake in disclosing these shares as "Stock-in-trade" was rectified by way of the Board's resolution also substantiates the claim that these shares were in fact held as "Investment" - Nomenclature of a transaction is not relevant. It is the real character of the transaction which is looked into - The facts and circumstances of the case should be considered - The period of holding of more than two years and the valuation of such shares at cost price in the earlier balance-sheet shows that the shares were in fact held as "Investment". Once the shares are held as `Investment, any profit or loss from their transfer has to be considered under the head `Capital gains' and not as `Business income' – Decided against Revenue. Disallowance u/s 14A – Held that:- Following Dhanuka & Sons VS. CIT [2011 (4) TMI 861 - CALCUTTA HIGH COURT] - Disallowance u/s 14A is attracted even when the securities fetching exempt income are held as stock in trade. Following Godrej & Boyce Mfg. Co. Ltd. VS. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Rule 8D of the IT Rule, 1962 is applicable from AY 2008-09 - The disallowance u/s. 14A of the Act can be made on "reasonable basis" in the years anterior to AY 2008-09 – For the AY 2006-07 the disallowance is required to be made u/s. 14A of the Act on some reasonable basis - The Kolkata Bench of the Tribunal has sustained addition in several cases u/s. 14A at the rate of 1% of the exempt income in the years prior to the A.Y. 2008-09 – Partly allowed in favour of assessee.
|