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2019 (7) TMI 70 - AT - Income TaxCorrect head of income - characterization of receipts - Gains/losses arising on purchase and sale of shares - Capital gain or business income - not engaged in any business activities other than purchase and sale of shares/mutual fund units - fund utilized for acquisition of shares are both borrowed as well as accruals of the business - CIT (A) treating long-term/Short-term capital gain/loss as business income - HELD THAT:- A similar pattern year after year may compel one to think the behaviour of an investor in a logical and rational manner, while the transactions might have been accepted as investment in the preceding year in a summary manner. There could be no res judicata in such cases in the light of continuity of the same behaviour in the subsequent assessment year. The continuity in the purchase and sale of shares being an important test to determine the character of transaction, the peculiar facts do not permit us to accept the plea of doctrine of consistency in the present case. CIT (A) in our view has seen facts of regularity in purchase and sale of shares for several years in a light-hearted manner and has ignored the clear commercial motive subsisting in the facts of the case. The assessee has paid substantial professional fees in its endeavour to corner gains from market fluctuations which fact also has not been envisioned in perspective while reversing the action of the AO. The CIT (A) while making reference to the circular of the CBDT has shunned the caution administered by the circular i.e. there cannot be any straightjacket formula and there should not be a sweeping conclusion but a case to case test or approach should be adopted. The issue is essentially factual and is governed by facts of each case. Judicial utterances made in the setting of the facts of a case would not thus apply unless it is shown that the facts are identical. We are thus not required to delineate the nicety of law de hors the facts in such a case. CIT (A) in our view has applied the legal principles in an abstract manner de hors the peculiar facts of the case and therefore, cannot be approved. We accordingly set aside the order of the CIT (A) and restore the action of the AO. - Decided in favour of revenue. Addition u/s 14A - HELD THAT:- We find that the CIT (A) has sweepingly dismissed the case of the assessee without dealing with the point objectively. In the absence of any allocable expenses remotely connected to the investment activity, no disallowance is called for in excess of actual expenditure. We thus find merit in the plea of the assessee.
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