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2016 (7) TMI 171 - ITAT DELHIProfit derived from share trading - business income OR long term capital gain exempt u/s 10(38) - Held that:- Once the assessee was consistently showing the shares as its investment, the same cannot be converted into stock-in-trade, unless the intention is proved otherwise. Ld. CIT(A) has pointed out that from the record it is evident that assessee company had distinct port-folio of shares and mutual funds under two categories i.e. investments and stock-in-trade. He has observed that during the last few years too the assessee company had followed the same practice of holding certain shares under the head “Investment” and some shares as “Stock in trade”. Therefore, as the assessee was holding the shares as investment consistently and the same were acquired out of own funds, there was no reason to treat the same as business income. - Decided against revenue Applicability of section 14A - Held that:- In view the decision of Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] held that though Rule 8D was not applicable but since administrative and personal expenses must have been incurred to earn exempt income, determined the disallowance at ₹ 63,352/-. Having heard both the parties, we do not find any reason to interfere with the order of ld. CIT(A) on this count, as he has made a reasonable disallowance of 5% of the expenditure incurred under the head administrative and personal expenses - Decided against revenue Addition of deemed dividend u/s 2(22)(e) - Held that:- Admittedly, the assessee was not a shareholder of Radhika Securities Pvt. Ltd. and, therefore, no deemed dividend could be added in the hands of the assessee company. Accordingly, we see no reason to interfere with the order of ld. CIT(A) in deleting the addition - Decided against revenue
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