TMI Blog2014 (8) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... he shares immediately thereafter and the purpose is very clear, i.e., to avail the benefit of exemption and concessional rate of tax - since the assessee has shown the shares as its stock in trade and further it has also declared the gains arising on sale of shares as its business profit only - the assessee has immediately sold the shares after the conversion - CIT(A) was justified in confirming the gains arising on sale of shares as the business income of the assessee by disregarding the claim of Long term Capital gain and Short term Capital gain – Decided against Assessee. TDS not deducted before prescribed due date u/s 40(a)(ia) – Held that:- The assessee has paid the TDS amount before the due date prescribed for filing return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the paper book. From the said statement, we notice that the assessee sold shares on 05.04.2005, 19-04-2005, 20-04-2005 and 26-04-2005. Since the assessee had classified the shares as Investments as on 01.04.2005, the assessee computed Long term Capital gain of ₹ 28,33,476/- and Short term Capital gain of ₹ 79,094/- for income tax purposes. The assessee claimed the long term capital gain as exempt u/s 10(38) of the Act and paid tax on Short term Capital gains at concessional rate u/s 111A of the Act. In the assessment proceedings, the AO did not recognize the conversion of Stock in trade into Investments by holding that the change of method of accounting was effected with a view to reduce the tax liability and also to claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that the assessee sold the shares, since they were fetching good prices. Accordingly, he contended that the tax authorities are not justified in rejecting the explanations of the assessee. The Ld A.R further submitted that the CBDT has prescribed various criterian to be examined to ascertain the nature of transaction. He submitted that the assessee is satisfying most of the tests prescribed by the CBDT. However, the Ld CIT(A) has confirmed the order of the AO without examining all the test criterias. Accordingly he prayed that the matter may be set aside to the file of the Ld CIT(A) for considering the matter afresh. 4. On the contrary, the Ld D.R submitted that the assessee was indulging in trading of shares in the earlier y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not substantiated with any document. The Ld A.R contended that the Ld CIT(A) did not examine the applicability of various tests prescribed by the CBDT in its Circular to determine the nature of transactions. In our view, the examination of the applicability of various tests is not required in the instant case, since the assessee has clearly brought out its intention by classifying the shares as its Stock in Trade in all the earlier years. Further the assessee is a legal person and its intention can be ascertained only through the documents, resolutions passed in Board meetings etc. The question of conduct of the assessee may be more relevant in the case of human beings. Further, the question of application of various test criterias pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessing officer should have excluded the long term capital gain while computing book profit u/s 115JB of the Act. Since, we have upheld the action of the assessing officer in assessing the gains arising on sale of shares as business income, the additional ground urged by the assessee becomes infructuous and accordingly liable to be dismissed. Accordingly, we dismiss the additional ground. 7. The next issue relates to the disallowance of ₹ 25,380/- made u/s 40(a)(ia) of the Act on the reasoning that the assessee did not pay the Tax deducted at source before the due date prescribed for the payment of the same. However, it is an admitted fact that the assessee has paid the TDS amount before the due date prescribed for fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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