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2013 (8) TMI 979 - AT - Income TaxDisallowance of interest - CIT(A) allowed claim - Held that:- Merely because of some of the occasion, there were credit balance in the current accounts, will not disentitle assessee’s claim of interest on the fund borrowed for the purpose of business. The rate of interest on the unsecured loan taken from the relatives cannot be compared to the rate of interest on the funds borrowed from banks, in so far as borrowings from banks are always secured loan provided after taking collateral and other securities Bank also mortgage the immovable property of assessee against the loan. However, loan from friends are relatives are generally unsecured, therefore, terms and conditions vis-à-vis rate of interest on secured loans and unsecured loans are always different. In the immediately preceding year, the Assessing Officer has allowed 18% interest on some borrowings while framing assessment u/s 143(3). Accordingly, we do not find any infirmity in the order of CIT(A) for deleting the disallowance of interest. Nature of income earned on sale of shares and securities - Held that:- There are so many other factors which are required to be considered while deciding the nature of income earned on such shares like volume and frequency of transaction, period of holding, past track record of assessee etc. . The ld. CIT(A) has deleted the addition by observing that volume of transaction alone cannot lead to presumption that gain would be assessable as business income. The ld. CIT(A) was not justified in ignoring the volume and frequency of transaction, while deciding the nature of income earned on sale of shares and securities, which were held as investment. In the interest of justice, the matter is restored back to the file of A.O. for deciding afresh.
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