Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 290 - AT - Income TaxDisallowance u/s 14A - HELD THAT:- Provisions of Rule 8D were not applicable to the year under consideration. Therefore, the disallowance was to be computed on some reasonable estimated basis keeping in view the assessee’s financials. The estimation of 10% as made by learned first appellate authority could not be said to be unfair or unreasonable, in any manner. From perusal of financial statements, it is observed that the assessee has debited administration and other charges for ₹ 7.93 Lacs which would include routine expenditure viz. salary, telephone, conveyance, directors’ remuneration, demat charges, service tax etc. Most of the expenditure would be statutory in nature and would be necessary to maintain corporate personality of the assessee. Therefore, the estimation as made by Ld. CIT(A), in our considered opinion, was quite fair and the same would not require any interference on our part. Long-Term capital gains to be exempt u/s 10(38) - HELD THAT:- Undisputed position that emerges is the fact that the stated investments were held by assessee since past many years. The investments were long term investments and reflected as such in the financial statements which is further evident from the fact that the assessee never made provision for diminution in value thereof on the Balance Sheet date. In fact, similar gains were accepted by department as Long-Term Capital gains in AYs 2005-06 & 2008-09 in scrutiny assessments u/s 143(3). Therefore, rule of consistency favored assessee’s stand. It is also the factual findings of Ld. CIT(A) that the stated investments were not out of borrowed funds, which fact remain undisputed before us also. The factual findings of Ld. CIT(A) at para 10.24 lead us to inevitable conclusion that the stated gains were rightly held to be assessable as Long-Term Capital gains rather than as business income. Therefore, we concur with the stand of learned first appellate authority, in this respect. Resultantly, the grounds raised by revenue stand dismissed. The revenue’s appeal stands dismissed. Short-term capital gains OR business income - HELD THAT:- CIT(A) has clinched this issue also in the right perspective. The average holding period of most of the scrips was found to be below 45 days. The assessee carried out multiple transactions with short selling which would be the attributes of a trader and not of an investor. AR, in the course of hearing, has relied upon the decision of Hon’ble Bombay High Court rendered in Jaya Chheda V/s ACIT [2017 (12) TMI 1357 - BOMBAY HIGH COURT] to submit that the formula of holding period as adopted by Ld. first appellate authority would not be conclusive. However, we find that learned first appellate authority, in the present case, has elaborately examined the nature of the stated transactions and on the basis of assessee’s conduct, formed an opinion that the assessee acted as trader and not as an investor. We also find that Ld. AR is unable to controvert the factual findings of Ld. CIT(A). Therefore, we see no reason to interfere with the impugned order, in this regard. Hence, concurring with the same, we dismiss the ground raised by the assessee. Ground No. 3 of assessee’s appeal is related with interest u/s 234, which would not require our indulgence.
|