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2024 (3) TMI 300 - AT - Income TaxCorrect head of income - treatment of income from sale and purchase of shares - business income or income from capital gains - HELD THAT:- In the present case, mere high volume of transactions and frequently investment in shares could not alter assessee's consistent treatment of shares purchased on delivery basis as investment duly accounted for in its books of account and shown in its Balance Sheet as investment, which was even accepted by revenue for proceeding years and subsequent years. Thus we are of the considered view that the appellant assessee has purchased the shares with the intention of investment. Respectfully, following the Later judgment of the Hon'ble Gujarat High Court in the case of “Pr. CIT v. Bhanuprasad D Trivedi, HUF” [2017 (9) TMI 840 - GUJARAT HIGH COURT] we hold that the assessee had purchased shares with clear intention of being an investor and held shares by way of investment, and gain arising out of transfer of shares would be treated as capital gains and not business income. Accordingly, the AO is directed to treat the income of the assessee arising out of transfer of shares as capital gains. Nature of expenses - Disallowance of legal expenses - HELD THAT:- In the Present case of the Assessee, the facts are similar to that of “CIT vs. Delhi Safe Deposit Co. Ltd [1982 (1) TMI 2 - SUPREME COURT] Appellant being holding the Chairmanship in M/s AB Hotels nothing but a profit earning asset of the Assesses. Thus, the expenditure incurred by the Assessee in order to protect the same would be an allowable expenditure. Respectfully, following the Hon’ble Apex Court in the case of “CIT vs. Delhi Safe Deposit Co. Ltd.”, (supra) we hold that in the present case, the legal expenses claimed by the assessee are allowable expenses u/s 37 of the Act.
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