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2016 (12) TMI 1421 - AT - Income TaxGain from sales of shares - business profit OR short term capital gain - Held that:- Assessee has dealt with in 8 scripts out of which in one of the script the assessee has earned a short term capital gain of ₹ 6731272/– and in other scripts there are minor profits or losses and further the assessee has also earned the long-term capital gain of ₹ 64905/-. On appreciation of the about transactions, The Ld. CIT appeal has held that the Scripts, which are held for less than 30 days, shall be chargeable to tax under the head business income relying on the decision of the Dreamland buildTech private limited. Subsequently, in that particular case assessee preferred appeal before the coordinate bench and vide order dated 12/12/2014 wide page No. 15 para No. 8.3 of the order of the appeal of the assessee was allowed and it was held that the entire profits from the purchases and sales of shares said to be assessed under capital gain, even though they are held for less than 30 days. The above finding of the coordinate bench was further affirmed by the Hon’ble high court vide its order dated 26/04/2016. Therefore, respectfully following the decision of the Hon’ble high court we also hold in the case of the assessee that even though the shares are held for less than 30 days same are chargeable to tax as capital gain and not as income from business profession in case of the assessee. Disallowance u/s 14 A - Held that:- Ld. assessing officer without recording the satisfaction that the claim of the assessee is incorrect has straightaway applied the provisions of rule 8D of the income tax rules, 1962. The above action of the Ld. assessing officer cannot be upheld in view of the decision of the Hon’ble Delhi High Court in case of CIT versus Taikisah engineering private limited [2014 (12) TMI 482 - DELHI HIGH COURT] that without recording the satisfaction against the claim of the assessee that it has incurred nil expenditure for earning of the exempt income the provisions of rule 8D cannot be invoked. In any case, the Ld. assessing officer has not pointed out any expenditure, which has been incurred by the assessee according to him for the earning of the exempt income of dividend of ₹ 8.60 Lacs. Further, the restriction of the disallowance to ₹ 40,000 by the Ld. 1st appellate authority does not have the support of the law. In view of this we direct the Ld. assessing officer to delete the disallowance under section 14 A of the income tax act of ₹ 40,000/- sustained by the Ld. 1st appellate authority. - Decided in favour of assessee
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