TMI Blog2010 (2) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... ge, hence, we restrict the disallowance to 5% as against 10% of total sale promotion expenses sustained by the ld. CIT(A) - Appeal is partly allowed - ITA No. 6190/Mum/2008, - - - Dated:- 4-2-2010 - D.K. Agarwal, Rajendra Singh, JJ. Pradeep Kapasi for the Appellant Satish Sharma for the Respondent ORDER D.K. Agarwal, Judicial Member 1. This appeal preferred by the assessee is directed against the order dated 25.7.08 passed by the ld. CIT(A) for the Assessment Year 2005-06. 2. Briefly stated facts of the case are that the assessee firm is engaged in the business of dealing in shares and securities, financing, badla finance, financial services and consultancy. It filed return declaring total income of Rs.11,44,290/-. However, the assessment was completed at an income of Rs.12,28,590/- after treating the short term capital gains as trading income Rs.7,62,892/-, disallowance of car expenses and depreciation Rs.41,886/-, business development expenses Rs.40,004/- and disallowance u/s.14A Rs.2,513/-, vide order dated 15.11.2007 passed u/s.143(3) of the Income tax Act, 1961(the Act). On appeal the ld. CIT(A) while upholding the views of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that on similar facts and circumstances the Tribunal in other cases has accepted the share transactions as short term capital gains: Chart Comparing Volumes with Other Decided Cases Criteria S.K. Finance (Assessee) Laxmichand Kenia Ramji Kenia Dhiraj Kenia Bharat Kenia Kunverji Kenia Period of holding 106 days 134 days 86 days 107 days 116 days 124 days No. of Scrips Purcha -sed 51 106 144 129 142 213 No. of Scrips Sold 49 104 129 105 168 173 Value of Purcha -ses 79,15,605 2,65,81,691 2,45,03,380 1,53,70,408 2,72,94,423 20,08,45,292 Value of Sales 79,35,156 2,38,20,271 2,06,27,334 1,31,47,240 3,69,83,128 10,59,95,053 No. Purcha -se days 315 days 268 days 234 days 261 days 236 days 177 days No. Sale Days 312 days 195 days 214 days 240 days 202 days 162 days In support, he has also filed cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in shares as investment in the balance sheets for the Assessment Years 2004-05 and 2005-06. It is also not the case of the revenue that the said investment in shares and mutual fund was found to be false and untrue. The revenue has placed no material to show that the assessee's case does not fall on the tests laid down by the CBDT in its Circular No.4 of 2007 (supra), to show that the shares held by the assessee are as stock in trade and not held as investment. Further, it is evident from the chart filed by the assessee, reproduced hereinabove, that the pattern of purchase and sale of shares by the assessee is almost similar to the other cases, decided by the Tribunal(supra). 9. In CIT vs. Gopal Purohit in IT Appeal No.1121 of 2009 dated 6.1.2010, the Hon'ble Jurisdictional High Court has upheld the finding of the Tribunal holding that the delivery based transactions in the present case should be treated as those in the nature of investment transactions and the profit received therefrom should be treated either as short term or, as the case may be, long term capital gain, depending upon the period of the holding and the finding of the fact arrived at by the Tribunal does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was produced to show that the car was entirely used for business purposes. Even at this stage the assessee placed no material to show that the car was exclusively used for business purposes or the partners are having their personal vehicles for their personal use. In the absence thereof, we are of the view that, the AO was justified in making the disallowance. In view of the specific provisions of Sec.38(2) r.w.s. 32(1)(ii) of the Act, the application of which has not been controverted by the ld. Counsel for the assessee, the decision in Mukesh K Shah vs. ITO (2005) 92 TTJ 1060(Mum.) relied on by the ld. Counsel for the assessee is distinguishable and not applicable to the facts of the present case. However, keeping in view the totality of the facts and circumstances of the case the disallowance of car expenses and depreciation is restricted to 1/6th as against 1/5th sustained by the ld. CIT(A). The ground taken by the assessee is therefore partly allowed. 16. Ground No.3 is against the partial disallowance of business development expenses Rs.40,004/-. 17. The brief facts of the above issue are that it is observed by the AO that the assessee has claimed business development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and update its clients in respect of its business of financing. The estimated disallowance of Rs.40,004/- being 10% of business development expenses (sale promotion expenses) Rs.4,00,457/- was made by the AO and sustained by the ld. CIT(A) on the ground that the expenses have not been incurred wholly and exclusively for business purposes. Considering the totality of the facts and circumstances of the case, including the decision relied on by the ld. Counsel for the assessee we are of the view that the personal use by the partners out of the aforesaid sale promotion expenses is not ruled out even at this stage, hence, we restrict the disallowance to 5% as against 10% of total sale promotion expenses sustained by the ld. CIT(A). The ground taken by the assessee is therefore partly allowed. 21. Ground No.4 is against the sustenance of disallowance of Rs.2,513/- u/s.14A of the Act. 22. At the time of hearing the ld. Counsel for the assessee submits that he does not want to press the above ground which was not objected to by the ld. DR. 23. That being so, and in the absence of any supporting material, the ground taken by the assessee is therefore, rejected being not pressed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
