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2015 (2) TMI 1124 - AT - Income TaxTransaction of shares - business income or capital gain - CIT(A) deleting the addition made by the AO of net short term capital gain as assessee's business income - Held that:- We find that the FAA has analysed the share transactions at length in light of the CBDT circular and has arrived at the conclusion that the assessee was a investor for most of the share transactions.He found that except for the shares of ADL and SIL the assessee had behaved as an investor.He found that the assessee had not borrowed any money for purchasing the shares,that except for the shares of ADL and SIL he had held the other shares for a very long period,that he was engaged in the business of computers.Not only this unsold shares were valued at cost.Considering these factors we are of the opinion that the assessee could not be taxed under the head business income for the entire share transactions.CBDT circular has recognised the principle that a person can have two portfolios- he can be an investor and a trader at the same time. After in depth analysis of the facts the FAA had rightly held that for the assessee was doing business of purchase and sale of shares of ADL and SIL,that in other cases he was only investor.We do not find any infirmity in his order - Decided against revenue Addition u/s 68 - CIT(A) deleting the addition - Held that:- We have perused the material on record.We find that the FAA has given categorical finding of facts about filing of confirmation letters of the creditors,copies of their bank accounts, acknowledgments of returns of income filed by them.In our opinion,these documents were sufficient to prove the genuineness of the transactions as well as the creditworthiness of the lenders.In our opinion the assessee had discharged the onus cast upon him,but the AO had not brought any evidence on record to negate the evidences produced by the assessee.In our opinion,the AO was not justified in invoking the provisions of section 68 for the loans taken in earlier assessment years.Considering the facts and circumstances of the case,we are of the opinion that the order of the FAA does not suffer from any legal of factual infirmity - Decided against revenue. Share transactions incomeof ADL and SIL as business income - Held that:- While deciding the appeal filed by the AO about STCG with regard to shares,we have discussed the facts in length. As stated earlier the FAA had held that the transactions undertaken by the assessee for those two companies could not be taxed under the head STCG. The FAA has given finding of fact that the assessee was buying and selling shares of ADL and SIL in a systematic and organised manner,that he traded in such transaction regularly and repeatedly.It is also clear from the order of the FAA that the assessee was a frequent purchaser and seller of the shares of both the companies.These facts clearly prove that the assessee could not be treated an investor as far as share transactions of these two companies are concerned.Therefore,confirming the well reasoned order of the FAA - Decided against the assessee. Disallowance u/s 14A - CIT(A) directed the AO to verify the claim of the assessee about common expenses incurred for earning exempt income and a make a proportionate disallowance - Held that:- The assessee had not filed any details before the AO and the FAA had asked the AO to make verification of the expenses and decide the issue of proportionate disallowance. In our opinion,the order of the FAA does not suffer from any legal infirmity.He has directed the AO to verify the claim made by the assessee about not incurring expenditure for earning exempt income and then take a decision.His order is legal and justifiable. So we confirm the same - Decided against assessee
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