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2021 (5) TMI 776 - AT - Income TaxCorrect head of income - Income from transaction of shares - CIT(A) in treating income under the head ‘Income from Business or Profession’ as against ‘Income from Short Term Capital Gains’ disclosed by the assessee - contention of the assessee is that the assessee is maintaining two separate portfolios i.e. investment portfolios and business portfolio - HELD THAT:- The income from transaction of shares held under investment portfolio has been returned under the head ‘capital gains’. The total number of transactions carried out by the assessee under investment portfolio during the period under appeal is 238. In assessee’s own case for assessment year 2006-07, the Tribunal accepted assessee’s ground on similar set of facts where the frequency of transactions were more than 360. Thereafter, in assessment years 2008-09, 2012-13 and 2014-15 similar issue had come up before the Tribunal where the Assessing Officer had changed the head of income in respect of income earned by the assessee from sale of shares. The assessee offered the income as ‘short term capital gains’ and the Assessing Officer treated the same as ‘business income’. The Tribunal decided the issue in each of the aforesaid assessment years by following the order of Tribunal in assessee’s own case in ITA No.2285/Mum/2010 for assessment year 2006-07 [2014 (1) TMI 1599 - ITAT MUMBAI] The Tribunal accepted assessee’s plea that the income from sale of shares has rightly been disclosed under the head short term capital gains and rejected Revenue’s view of holding the income as business income. Disallowance u/s 14A r.w.r. 8D(2) - short contention of the assessee is that the disallowance may be restricted to exempt income earned - HELD THAT:- This issue is no more res-integra that disallowance under section 14A of the Act cannot exceed exempt income earned. [Re. PCIT v. State Bank of Patiala [2018 (4) TMI 23 - PUNJAB & HARYANA HIGH COURT] The Hon’ble Supreme Court of India [2018 (11) TMI 1565 - SC ORDER] dismissed the SLP of revenue against the judgement of Hon’ble High Court]. The Assessing Officer is directed to restrict the disallowance under section 14A of the Act to the extent exempt income earned by the assessee during the period relevant to the assessment year under appeal. The ground No.2 is partly allowed in the terms aforesaid. Charging of interest under section 234A, 234B and 234C and 234D - HELD THAT:- Charging of interest under aforesaid sections is mandatory and consequential, hence, the ground No.3 raised by the assessee is without any merit, hence, dismissed.
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