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2016 (7) TMI 663 - AT - Income TaxProfit from transaction of units and shares - STCG on transaction of purchase and sale of units of mutual funds and shares - Capital Gain or Business income - Held that:- It is not in dispute that the Assessee had treated the shares and units as investments in its books of accounts. Similar transactions have been accepted by the revenue in assessments for AY 2001-02 to 2003-04 as giving raise to capital gains and not as business income. In fact the assessment in AY 2003-04 was completed u/s.143(3) of the Act after scrutiny. In the light of the above circumstances prevailing in the case of the assessee, we are of the view that the conclusion of the CIT(A) that the income from sale of shares and units declared by the assessee as capital gain has to be accepted is correct and calls for no interference. As we have already seen that the AO in AY 03-04 accepted similar income as capital gain. It is not disputed by the revenue that the facts and circumstances in the AY 03-04 & 04-05 are identical. Though the rule of res judicata is not applicable but the principle of consistency will definitely apply and on that basis the claim of the Assessee should be held to be proper. - Decided against revenue Denial of the claim of the assessee for deduction u/s 80HHC - Held that:- The prayer of the learned counsel for the assessee that the decision on this issue was rendered by the Hon’ble Supreme Court in the case of Topman Exports (2012 (2) TMI 100 - SUPREME COURT OF INDIA ) which was after passing the of the impugned order of the CIT(A) and therefore the issue should be directed to examined by the AO in the light of the decision rendered above is acceptable. Accordingly the issue is remanded to the AO for fresh consideration in the light of the decision cited above. Disallowance u/s 14A - Held that:- The Hon’ble Calcutta High Court in the case of CIT Vs. M/S.R.R.Sen & Brothers Pvt.Ltd. [2013 (7) TMI 260 - Calcutta High Court] held that computation of 1% of exempt income as disallowance u/s.14A of the Act was proper. In view of the aforesaid decisions, we are of the view that the request made by the learned counsel is acceptable. The disallowance u/s.14A is accordingly directed to be restricted to 1% of the exempt income.
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