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2011 (1) TMI 28 - AT - Income TaxBusiness income versus capital gains - Dis allowance u/s 14A - assessee is a company engaged in activities of NBFC and doing financing, money lending, investment and sometimes trading activities - whether such voluminous and frequent purchase and sale of shares should be treated as investment activity or business activity, in spite of treating by the assesee such transactions as investment activity and booking the result under the head investment activity - A.O. has treated entire amount of capital gains as business income. A.O. has disallowed entire amount of STT, by treating all shares and units as capital asset He has not allowed rebate u/s. 88E in respect of STT paid though he treated Capital gains as business income. - Held that: - the assessee has proved its bonafide as an investor of shares and taking the totality of facts, into consideration - income arising from purchase and sale of shares to be income arising from investment chargeable to tax as income from capital gains. Assessee earned dividend income of Rs. l,43,525/- - Tribunal took the consistent view of disallowing 1% of the dividend income as expenses incurred for earning such dividend. Therefore, the disallowance comes to Rs. 1435/-. This ground of the assessee is, therefore, partly allowed.
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