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2014 (2) TMI 890 - AT - Income TaxNature of Surplus - Whether the surplus arising to the assessee on account of purchases and sales of Mutual Fund Units is to be considered under the head “income from capital gains” or “income from business” – Held that:- The assessee had all along shown the units purchased by it under the head “investment” - Assessee was engaged in the business of manufacturing and exporting of leather goods – the CIT(Appeals) finding that assessee held the Mutual Fund units as investments has not been effectively rebutted by the Revenue - When the intention of the assessee was only to make investment, sale thereof would only result in capital gains - There is no case for the Revenue that assessee's main business was trading in Mutual Fund Units or shares - the surplus arising to the assessee was rightly considered as income from capital gains – there is no reason to interfere in the findings of the CIT(Appeals). Deletion of addition – Differences in purchase of Mutual Funds – Held that:- Revenue has not been able to bring out anything to show that any of the explanations were erroneous or wrong - the Assessing Officer found that the differences in purchases highlighted by him in the assessment order stood explained - CIT(Appeals) has given a finding that discrepancies pointed out by the Assessing Officer were on account of non-application of mind while preparing remand report - Assessee had clearly explained it as Units of Prudential ICICI Floating Rate Fund – there is no reason to disbelieve it – thus, none of the discrepancies alleged by the Assessing Officer existed – the CIT(Appeals) was justified in holding that there was no difference in purchase of units or closing stock of investment in Mutual Fund Units and the additions deleted by the CIT(A) also upheld – Decided against Revenue.
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