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2018 (12) TMI 1325 - AT - Income TaxSale of investment in shares - business income OR capital gains - Held that:- In the entire framework of the Income Tax Act, there is no direct and specific embargo for conversion of stock-in-trade of shares to investment and vice versa. That over the years, Hon'ble Courts have held once such conversation has taken place, assessee should maintain that pattern. There should not be any further change in the pattern and thereby, statement of the accounts should also be maintained. In effect, there should not be any action of the assessee by which any loss arises to the Revenue. In the instant case, it is not disputed that conversion has taken place from stock-in-trade to investment and also that the Hon'ble Apex Court in the case of Sir Kikabhai Premchand (1953 (10) TMI 5 - SUPREME COURT) wherein it has been held that such conversion is not something not known to the commercial world and there is no legal bar on the same. Therefore, in view of the matter, we set aside the order of CIT(Appeals) on this issue. Claim u/s 80IA - Held that:- Velayudhaswamy Spinning Mills (P.) ltd. Vs. ACIT (2010 (3) TMI 860 - MADRAS HIGH COURT) and on the basis of said decision CBDT had issued Circular No.1 of 2016, dated 15.02.2016 clarifying term 'initial assessment year' in section 80IA(5), order of Tribunal holding that assessee was entitled to deduction under section 80IA without setting off losses/unabsorbed depreciation pertaining to windmill, which were set off in earlier year against other business income was deserved to be upheld. The CBDT vide Circular No.1/2016, dated 1502.2016 has also clarified situation of claim of deduction under section 801A(4) of the Act by any concern by adopting initial assessment year as the first year of claim, irrespective of the fact that the windmill was installed and started functioning in any of the earlier years. Following the same parity of reasoning, we hold that the assessee is entitled to claim deduction u/s.80IA(4) of the Act. The ground of appeal No.4 raised by the assessee is thus, allowed. Penalty u/s.271(1)(c) - claim of deduction under section 80IA - Held that:- Interpretation along with guidance taken from the decision of Hon'ble Apex Court in the case of Liberty India Vs. CIT (2009 (8) TMI 63 - SUPREME COURT) wherein, it has been categorically held that the eligible profits are to be computed as if such eligible business is the only source of income of the assessee. Further, CIT(A) analyzed that the AO has apparently proceeded to treat assessee’s making a claim of deduction u/s 80IA as furnishing of inaccurate particulars of come. The expression ‘inaccurate particulars of income’ cannot be extended to the issues, which are capable of different interpretations under law and therefore, the case of the assessee cannot be said to be a case of ‘furnishing of inaccurate particulars of income’ - Decided in favour of assessee.
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