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2011 (1) TMI 1056 - AT - Income TaxBusiness income Vs. Capital gain - assessee is a broker as well as investor - Held that:- the assessee is a broker as well as investor. It has maintained the investment portfolio separately, income for which was liable to be taxed as capital gains, as the intention in respect of this was to hold the investment as investment only and was shown as such in the books of account and income therefor was shown and treated as capital gains in the successive assessments.It is thus clear that assessee was holding certain stock for the purpose of doing business of buying and selling and at the same time it was holding that other shares as its capital for the purpose of dividend income. These were duly recorded in separate accounts. Disallowance u/s 43B - SEBI registration fees - Held that:- The assessee submitted that the said liability accrued in the previous year relevant to asst. yr. 2005-06 and therefore, it is so claimed in this year - Hon'ble Calcutta High Court vide its order dt. 25th May, 2004 directed the stock brokers to pay the registration fees by adopting their own definition of turnover and thereafter SEBI formulated the scheme dt. 15th July, 2004 directing the broker to pay the fee.Therefore, the liability is settled in this year only and the same was accordingly claimed in this year hence need to be allowed. Regarding addition u/s 14A - Assessee was asked to explain why the proportionate administrative and management expenses incurred for earning the exempt income should not be disallowed under section 14A - Held that:- As in the case of Godrej & Boyce Mfg. Co. v. Dy. CIT (2010 (8) TMI 77 - BOMBAY HIGH COURT) has held that even when prior to asst. yr. 2008-09, when rule 8D was not applicable, the AO has to enforce the provisions of sub-section (1) of section 14A - AO must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record - Appeal is allowed by way of remand
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