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2016 (6) TMI 53 - AT - Income TaxIncome from sale of shares and securities - short-term capital gain OR profit and gains of business - Held that:- Mere not using interest bearing borrowed funds is not sufficient to conclude that transaction of share sales are not business income. Having regard to the volume and frequency of the transactions, no separate books of accounts or demat accounts and other facts and circumstances, we are of the opinion that overall effect of all the factors revealed that the activity of sale and purchase of shares claimed under the head ‘short-term capital gain’ cannot be sustained and it is held as the activity in the nature of business and assessable under the head ‘profit and gains of the business’. Accordingly, we uphold the finding of the learned Commissioner of Income-Tax(Appeals) on the issue in dispute and the ground of the appeal is dismissed.- Decided in favour of assessee. Disallwoance of credit of security transaction tax under section 88E of the Act in consequence of taxing the short-term capital gain under the head ‘profit and gains of business and profession’ - Held that:- As we have already upheld the findings of learned CIT(A) of taxing the transactions claimed under the head ‘short-term capital gain’ under the head ‘profit and gains of business and profession’, the assessee deserves for credit of Security Transaction Tax under the section 88E of the Act. Accordingly, we direct the Assessing Officer to allow that credit in accordance to law after verification of the security transaction tax paid. Penalty u/s 271(1)(c) - Held that:- we are in agreement with the submission of the learned Authorized Representative that all the factual information in respect of transaction of purchase and sale of shares was duly provided to the AO and no part of income was concealed, nor furnished any inaccurate particulars of income by the assessee. We find that in same set of information the income assessed under the head ‘profit and gains of business or profession’ rather than under the head ‘short-term capital gain’. The learned Commissioner of Income Tax(Appeals) relied on the case of Commissioner of Income Tax, Ahmedabad Vs. Reliance Petroproducts Private Limited,, [2010 (3) TMI 80 - SUPREME COURT] wherein held mere making of a claim, which is not sustainable in law, would not, ipso facto, amount to furnishing inaccurate particulars regarding the income of the assessee and would, therefore, not automatically result in a penalty order against the assessee - Decided in favour of assessee.
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