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TMI Blog2012 (7) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... e and style of M/s Hadfield Industries & another business of trading in chemicals under the name and style of M/s First Chemicals. During the year under consideration the assessee has shown income from other sources and short term capital gain also. 3. During the course of scrutiny assessment, the Assessing Officer disallowed detention charges of Rs. 2,82,702/- by observing that it was penal in nature. 4. After considering the detailed submissions and recording following findings, the Commissioner of Income Tax (Appeals) deleted the addition :- "4.1 The first ground of appeal is with respect to the amount paid as detention charges at Rs.282,702/-. The A.O. has held that such detention charges are penal in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual in nature and there was no infringement of any law, therefore, the disallowance made by the Assessing Officer u/s 37(1) was not justified. The detailed finding recorded by Commissioner of Income Tax (Appeals) to the effect that the expenditure incurred by the assessee for delay in returning the containers is a normal and regular procedure of custom and as such the payment is nothing but in the nature of demurrage and simply because it is paid to the custom department, the nature cannot be changed. We do not find any infirmity in the order of the Commissioner of Income Tax (Appeals) in deleting the disallowance of expenditure of Rs. 2,82,702/- incurred on account of detention charges. 5. The next ground relates to deletion of disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2.2 It is seen from the record that the turnover of the appellant in the proprietary business of M/s Hadfield Industries is Rs.27,01,569/- and the turnover of the other proporietary business of M/s First Chemicals is Rs. 11,28,97,629/-. The total commission paid by him is the two respective businesses are Rs. 10,47,349/- and Rs. 7,55,700/-. As against this the commission which has been disallowed by the A.O. is Rs.1,20,644/-. Considering the nature of the business, payment of the commission is a normal routine business expenditure. The appellant has filed copies of the debit notes raised by the two recipients. Their PAN are also on record. Therefore, the disallowance is not called for, the same is deleted." 6. We have considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e" is a vexed question depending upon facts and circumstances of each case, based upon the principles set out by various judicial precedents. 8. We have considered the rival submissions of the parties, gone through the orders of the authorities below and find from record that the assessee was investing in shares. At the beginning of the year, under consideration, the shares were held by the assessee as investment which were bought in earlier years. These shares were sold during the year along with some other shares acquired during the year. The assessee has long term capital gain of Rs. 8,51,495/- on sale of shares which were held for more than one year and also short term capital gain of Rs. 10,74,688/- on shares for which delivery was ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n delivery based shares was treated as short term capital gain since the shares were held for less than 12 months. This order of the Tribunal was confirmed by the Hon'ble jurisdictional High Court and reported as 19 ITJ 326 wherein it was observed that where the assessee had showed income from delivery based transaction as capital gain and non-delivery based transaction as business income, the Tribunal was justified in holding that intention of the assessee was to make investment in shares and that the assessee can have two port folios, one for investment and other for share trading. Hon'ble High Court further held that the Tribunal was justified in holding that in respect of delivery based shares held for less than 12 months, the profit ea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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