TMI Blog2012 (12) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... r vouchers are possible. We agree that it may not be possible to have proper evidence in respect of conveyance and miscellaneous expenses etc, but since the expenses are not supported by the proper evidence, the estimated disallowance of such expenses is justified. The estimate disallowance of Rs. 50,000/- out of these expenses will meet the ends of justice. Partly allowed in favour of assessee Nature of income - Sale and purchase of shares – Investment activity or trading activity - Capital gain or business income – Held that:- All delivery based shares cannot be treated as an investment activity. Some shares have also been sold after a short duration of holding. Thus most of the transactions are speculative in nature. The share transactions from which the assessee has shown short term capital gain were of the nature of trading activity of the assessee. In favour of assessee - IT APPEAL NO. 7881 (MUM.) OF 2010 - - - Dated:- 12-9-2012 - D. MANMOHAN AND RAJENDRA SINGH, JJ. Jitendra Singh for the Appellant. Amar Deep for the Respondent. ORDER Rajendra Singh, Accountant Member - This appeal by the assessee is directed against the order dated 29.10.2010 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the matter carefully. The dispute is regarding the estimate disallowance of telephone and mobile expenses for personal usages. Personal usages of telephone/mobile is quite common and cannot be ruled out and in the absence of full details of call records etc., it is not established that these have been used only for the purpose of business. Therefore, the estimated disallowance is justified. The disallowance made by the CIT(A) @ 5% which comes to Rs. 2,200/- per month is reasonable. Therefore, the order of the CIT(A) is upheld. 4. The third dispute is regarding the estimate disallowance out of business promotion expenses, conveyance expenses, miscellaneous expenses and office expenses. The A.O. noted that the assessee had claimed total expenditure of Rs. 9,21,860/- under these fourheads. The A.O. observed that there were no proper vouchers which were only self made or generated by the assessee and, therefore, the expenditure was not supported by the proper evidence. He, therefore, disallowed 20% of such expenses amounting to Rs. 1,84,372/-. The assessee disputed the decision of the A.O. and submitted before the CIT(A) that the entire expenses were incurred for the purpose of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no scope of carrying out independent business of trading in shares. The CIT(A) however, was not satisfied by the explanation given. Considering the high frequency of transactions and low holding period, he considered that the intention of the assessee was to trade. However, he noted that the assessee had also derived gain from sale of bonus shares. The bonus shares had arisen from the share held as investment and, therefore, these could not be treated as trading. The CIT(A) accordingly directed the A.O. to treat the gain arising from sale of bonus shares amounting to Rs. 650890.24 as "Short Term Capital Gain" and the balance amount of Rs. 3,99,706/- as "business income". Aggrieved by the decision of the CIT(A), the assessee is in appeal before the Tribunal. 5.1 Before us, the ld. AR for the assessee reiterated the submissions made before the lower authorities that the assessee had been an investor and in the earlier years, investments had been accepted. It was thus argued that the claim of Short Term Capital Gain should be accepted. Reliance was placed on the decision of Tribunal in the case of Gopal Purohit v. Jt. CIT [2009] 29 SOT 171 (Mum.) which has been upheld by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of transactions. 6. In this case, the details of share transactions giving the date of purchases and sale have been placed on record. It is clear from the details given that in most of the cases shares have been sold on the very date of purchase which shows that sales have been made even without taking delivery. Thus most of the transactions are speculative in nature. In fact the assessee while giving the details of the transactions has himself mentioned "Speculative Short Term Capital Gain". The other shares have also been sold after a short duration of holding. The numbers of transactions are very large and the assessee is almost buying or selling on the daily basis. There are 3000 transactions and the details run through several pages. The pattern of transactions clearly shows that the assessee is trading in shares and is not an investor. Therefore, we do not find any merit in the claim of the assessee that the shares have been bought and sold as an investment activity. 7. The ld. AR for the assessee has relied on the decision of the Tribunal in the case of Gopal Purohit (supra) to argue that income from all delivery based transactions has to be assessed as income as held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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