Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 1152 - AT - Income TaxIncome from transaction of shares - capital gain or business income - AO has held that the shares were stock in trade - Held that:- The assessee is a company, which is engaged in the principal business of consulting. The major income of the assessee is shown of consultancy income is shown as the business income. The assessee is holding these shares, which are sold during the year in the books of accounts as investments and not a stock in trade. Assessee has also not borrowed any funds for the purpose of making any investments. In the earlier 2 years assessment on identical facts and circumstances the income from purchase and sale of the shares were also held by the Ld. assessing officer as capital gains. All the shares sold by the assessee are based on actual deliveries. All the shares shown by the assessee are held in its demat account and dividend income earned by the assessee as dividend of ₹ 1 661 8416/– in this year and in previous year of ₹ 1 028 9473/– is also shown as exempt income during the year. All of the shares are valued at cost Only as an investment. The memorandum and articles of Association of the company also authorizes it to invested surplus funds in shares or in any other form of investments Assessee is an investor and not a Trader in shares. Therefore, looking to the facts of the case, we confirm the finding of the Ld. CIT (A) in holding that the income of short-term capital gain shown by the assessee on sale of shares is likely to be charged under the head capital gains and not under the head business income. With respect to the addition made on account of business income instead of short-term capital gain on sale of the shares is dismissed. - Decided against revenue Disallowance u/s 14A - AO's non satisfaction about the correctness of the claim - Held that:- In the present case unless the ld Assessing Officer records his satisfaction about the correctness of the claim of the assessee cannot move ahead for application of Rule 8D of the Act. The Hon'ble Delhi High Court in case of CIT Vs. Taikisha Engineering India ltd (2014 (12) TMI 482 - DELHI HIGH COURT) has held that it is only when voluntary disallowance made by the assessee u/s 14A of the Act is found to be unsatisfactory on examination of accounts, that Assessing Officer is entitled and authorized to compute deduction under Rule 8D of the IT Rules. As in the present case no such satisfaction is recorded respectfully following the decisioin of Hon'ble Delhi High Court we confirm the finding of the ld CIT(A) to delete the disallowance u/s 14A of the Act. - Decided against revenue
|