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2016 (1) TMI 571 - ITAT MUMBAIInvocation of provisions of section 73 - Loss on sale of investment - whether business loss or speculation loss - whether the profit on sale of shares constitutes business income or capital gains in order to ascertain as to whether the shares were purchased by the assessee as investment or stock in trade? - Held that:- The intention of the assessee becomes relevant which can be gathered from the facts available on record. Admittedly, it is not the only criteria, which can be adopted as a conclusive test and has to be analyzed on the touch scale of various judicial pronouncements/circulars issued from time to time by the CBDT. The treatment given to such purchases in its books of accounts by the assessee is also one of the relevant factor, whether it is treated as investment or stock in trade and also whether shown opening/closing stock or shown separately as investment or non-trading asset. Also whether the assessee borrowed money for purchasing such shares and paid interest thereupon. The frequency of transactions, the dates of purchase and sale holding period also indicative of the intention of the assessee. It is not worthy that in earlier years, the department had been accepting to the stand of the assessee as investment in shares, therefore, unless and until contrary facts are brought on record, a different view is not expected, on the principle of consistency. So far as, invocation of section 73 of the Act is concerned, the case of the assessee, is covered by the ratio laid down by Hon’ble Delhi High Court in Bhagwan Das Rameshwar Dayal (1984 (5) TMI 35 - DELHI High Court ). No wise businessman will suffer loss neither there is intention to suffer loss rather the investment is gainfully made for earning income, thus, treating the business transaction as speculative in nature is the subjective approach of the Assessing Officer. We find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals) setting aside the invocation of provisions of section 73 treating the loss on sale of investment as business loss and not speculation loss - Decided in favour of assessee So far as, allocating expenses towards speculative transaction are concerned, since, the above grounds have been decided in favour of the assessee, by holding that it was not a speculative business transaction, therefore, we find no merit in the ground of the assessee. The total turnover of the assessee is ₹ 7,76,72,915 and loss is about 1% of the total turnover. Thus, we find no infirmity in upholding the addition to the extent of ₹ 10,08,268/- and deleting the addition of ₹ 46,50,365/-. This ground of the Revenue is therefore, dismissed. Addition u/s 36 - payment of provident fund contribution was made beyond the prescribed due date - CIT(A) deleted the addition - Held that:- We note that assessee made payment of ₹ 1,94,268/-, being the employees contribution, of the month of September 2008 to the provident fund account beyond the due date i.e. 15/10/2008. The assessee made the payment within the grace period of five days, thus, there is no delay of payment the amount. The case of the assessee is covered by the decision from Hon’ble Delhi High Court in CIT vs P. M. Electronics (2008 (11) TMI 3 - DELHI HIGH COURT) wherein, it was held that if the payment in PF and ESI account are made before the due date of filing of return u/s 139 of the Act then no disallowance of such payment is to be made u/s 43B of the Act. Thus, we find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals) - Decided in favour of assessee
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