TMI Blog2021 (8) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... gain/loss on the sale of shares of HCL Technologies Ltd. thereby taking the same to be assessable under the head capital gains as per law. Hence, appeal of the assessee is allowed. - I.T.A. No. 7828/DEL/2019 - - - Dated:- 18-8-2021 - Ms Suchitra Kamble, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : Sh. M. R. Sahu, CA For the Respondent : Sh. Prakash Dubey, Sr. DR ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against order dated 29/07/2019 passed by CIT(A)-1 Gurgaon, for assessment year 2015-16. 2. The grounds of appeal are as under:- 1. That on the facts and circumstances of the case and in law the Ld.CIT(A) has erred in confirming the finding of the AO that transaction of sale of shares of M/s HCL Technologies Ltd reflect active involvement of assessee as a ' trader' rather than as an 'investor' ignoring the fact that assessee is actively involved in other gainful activities. 2. That on the facts and circumstances of the case and in law , the Ld.CIT(A) has grossly erred in confirming the order of the AO that assessee's dealing in the shares of M/s HCL Technologi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income for Assessment Year 2015-16 declaring total income of ₹ 33,53,380/-. The Assessing Officer observed that the short term capital loss of ₹ 1,23,14,530/- was mainly on account of sale of shares of one Company namely HCL Technologies Ltd. which was completed by the assessee as an investment and the Assessing Officer treated the same as business of trading in shares. The Assessing Officer further observed that HCL Technologies Ltd. had announced its scheme of issue of bonus shares during the period January, 2015 i.e. on 31.01.2015. As per this scheme the company M/s HCL Technology Ltd. would issue bonus shares to the existing shareholders on 20/3/2015 in proportion of 1:1. The shares became the ex-bonus- share as on 19.03.2015. The assessee purchased 11,400/- equity shares in M/s. HCL Technologies Ltd. from 17/3/2015 to 18/3/2015. After the allotment of bonus shares, the assessee sold the entire holding of 11400 shares held as original shares as 23.03.2015 and incurred a loss of ₹ 1,23,14,530/-. The purchase of shares of M/s HCL Technology Ltd. was made out of funds generated in the form of loan from M/s Aditya Finance. Therefore, the Assessing Officer ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii)UOI Vs. Azadi Bachao Andolan (2003) 263 ITR 706 (Supreme Court) (iv) Porrits Spencerr (Asia) Ltd. Vs. CIT (2010) 329 ITR 222 (P H High Court) (v) Banyan Berry Vs. CIT(1996) 222 ITR 831 (Gujrat High Court ) (vi) CIT Vs. Special Prints Ltd. (2013) 356 ITR 404 (Gujrat High Court) (vii) Bhourka Engineering Industry Ltd. Vs. DCIT (2013) 356 ITR 25 (Karnataka High Court). 6. The Ld. AR submitted that Lower Authorities have erred in the activity of dealing in shares of HCL Technologies Ltd. as a business activity. The assessee was wholly time involved as managing partner of M/s Hi Row Industries and there was neither an organization activity or trading in shares and there was neither any organizationally support in this regard. Lower Authorities have erred in confirming without bonus shares received form part of stock in trade and taking the cost of shares sold on an average basis also wrong. The Ld. AR relied upon the decision of the Hon'ble Supreme Court in case of CIT Vs. Madan Gopal Radhe Lal 73 ITR 652 and also relied upon the decision of the Hon ble Bombay High Court in case of PCIT Vs. Ashok Apparels Pvt. Ltd (2019) 106 Taxman.com 63 (Bombay High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/PN/2012 824/PN/2012 order dated 30/1/2015. Thus, the Ld. AR prayed that the appeal of the assessee be allowed by treating the assessee as an investor for purchase and sale of shares of HCL Technologies Ltd. 7. The Ld. DR relied upon the assessment order and the order of the CIT(A). The Ld. DR further submitted the shares were purchased through loan taken from M/s Aditya Finance. The Ld. DR further submitted that the Circular No. 6 dated 29.02.2016 is only applicable for 12 months and not applicable in assessee s case. Thus, the Ld. DR submitted that the appeal of the assessee be dismissed as the CIT(A) has taken cognizance of all the aspects and confirmed the addition. 8. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that HCL Technologies Ltd. had announced its scheme of issue of bonus shares during the period January, 2015 i.e. on 31.01.2015. As per this scheme the company M/s HCL Technology Ltd. would issue bonus shares to the existing shareholders on 20/3/2015 in proportion of 1:1. The shares became the ex-bonus- share as on 19.03.2015. The assessee purchased 11,400/- equity shares in M/s. HCL Technolo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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