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2017 (3) TMI 41 - GUJARAT HIGH COURTSurplus earned from sale of shares - business income OR short term capital gain - Held that:- Considering the fact the major amount of capital gain is in respect of script in the name of Lok Housing and Construction Ltd. of which the assessee has sold 4,37,000 shares and has earned a capital gain of ₹ 2,03,86,894/- and that the assessee applied for acquiring fully convertible warrants of the said Company on 26/02/2006 and paid 10% i.e. ₹ 4.60 per warrant for 95,000 warrants at the time of application and thereafter on 10/05/2006 warrants were allotted to the assessee for an amount of ₹ 4,37,000/-, which duly appeared in the balance sheet as on 31.03.2007 under the investment in shares head and thereafter in the beginning of Financial Year 2007-08 assessee in order to get warrants converted into equity shares paid the balance amount i.e. 90% i.e. ₹ 39.33 lakhs and acquired the equity shares of the company and got it in demat form and all the aforesaid shares came to be sold in between 01/08/2007 and 05/02/2008, the learned tribunal noticed that the assessee paid the interest on borrowed funds for paying ₹ 39.33 lakhs towards balance amount of allotment money for converting warrants into shares and paid interest of ₹ 8,48,296/- to his relatives from whom fund was borrowed, however, did not claim the said interest expenditure against business income. Considering above it cannot be said that the learned tribunal has committed any error in confirming the order passed by the learned CIT(A) deleting the addition made by the Assessing Officer of ₹ 2,04,87,755/-, which was made treating the same as income from business. We are in complete agreement with the view taken by the learned tribunal.
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