Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 739 - AT - Income TaxTreatment of short term capital gain as business income - investment in shares – Assessee is an individual and proprietor of M/s. Urmi Plastics which is engaged in the business of manufacturing of PVC, pouches and tubing - Apart from business income, assessee also showed capital gain income both under the head long term and short term for share transactions – Assessee's share transactions are to be considered as trading transactions assessed both short term capital gain and long term capital gain offered by the assessee as business income - Held that:- Assessee was involved in share transactions in earlier years and also in later years. Considering the transactions and submissions of the assessee, the same cannot be treated as business income as assessee had no borrowed funds, no set up to do share transactions as a trading activity - Coupled with the fact that the assessee has neither claimed benefit of opening and closing stock, nor AO disturbed the working of the assessee except treating the gain as business income, income declared by the assessee as short term capital gain can not be treated as business income. Transaction to be treated as short term or long term capital gain - Assessee got the shares transferred to demat account as on 31.03.2005 and sold as on 18.04.2005 - There is no verifiable evidence to establish whether the assessee purchased shares on 02.04.04 as claimed – Held that:- Assessee purchased the shares and transferred them into demat account on 31.03.05 - Gain earned by the assessee can be brought to tax as capital gain but as short term capital gain, as there is evidence of purchase as on 31.03.05 and sale as on 18.04.05 - A.O. is directed to treat gains as short term capital gain and tax accordingly. Commission amount on presumption and notion for computing tax - Commission paid at 5% for arranging long term capital gain – Held that:- The transaction is neither proved as an arranged one and nor there is evidence on record that the assessee arranged transaction by paying any commission. The presumptions cannot be made while bringing an amount to tax and no notional amount can be brought to tax – Deletion of commission amount as there is no evidence of assessee paying any commission so to sustain the addition so made.
|