TMI Blog2014 (1) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... BOMBAY HIGH COURT] - When the factual position is very clear in the case that the assessee is holding the shares as an investment and the profit arising out of sale of shares is capital gains either long term or short term - The gains on account of transfer of shares shall be treated as capital gains as against business income assessed by the A.O - Decided against Revenue. Disallownace u/s 14A - Held that:- The CIT(A) was not justified in not directing the assessing officer to recompute disallowances as the calculations made by him under Rule 8D (2) (ii) and (iii) were erroneous as he computed these disallowances on the entire amount of investments appearing in the balance sheet instead of taking the average of value of those investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound as raised in ITA No. 1703/K/2010 for AY 2006-07 reads as under: "That on the facts and in the circumstances of the case, Ld. CIT(A) erred in treating regular transactions in shares as capital gain without showing any proof that the transactions were capital in nature." 3. We have heard rival submissions and gone through facts and circumstances of the case. Briefly stated facts are that assessee has declared short term capital gain of Rs.12,02,996/- and long term capital gain of Rs.75,64,938/- from sale of shares. During the course of assessment proceedings, AO noticed that the assessee is carrying on share transactions in a systematic and organised manner with a motive to earn profit and accordingly, he assessed capital gains decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f DCIT Vs. Reliance Trading Enterprises Ltd. (ITAT No. 944/Kol/2008 dt. 3.1 .2008) and host of other important case laws mentioned as under for deciding this issue: CIT V. H. Holck Larsen (1986) 160 ITR 67 (SC) CIT V. Rewashankar A. Kothari (2006) 201 CTR 510 (Guj) CIT V. Ramamrithans (2008) 217 CTR 206 (Mad) CIT V. Associated Industrial Development Co. Ltd. (SC) 82 ITR 586 Janak S. Rangwalia V. ACIT (2007) 11 SOT 627 (Mum. Trib.) CIT V. N.S.S. Investments P. Ltd. (2005) 277 ITR 149 (Mad) Bombay Gymkhana Ltd. V. ITO (220) 115 TTJ 639 (Mum. Trib.) Gopal Purohit V. JCIT, (2010) 228 CTR (BOM) 582 Sarnath Infrastructure P. Ltd. V. ACIT (2009) 313 ITR (AT) 13 (Lucknow) DCIT V. Reena Sarogi (ITA No. 1202/Cal/98 332/Cal/2001) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, it is also a fact that the assessee in earlier years as well as in future years has declared the investment and accepted by revenue as it is. The accounting treatment given by assessee has never been disturbed by revenue. In earlier years and in future years assessee's contention for all along been accepted. Even otherwise, systematically the assessee is making investment and the systematic investment is nothing but investment not trading. We have gone through the entire pattern and system of the assessee's purchase and sale which is filed in assessee's paper book pages 11 to 31. Even the assessee has filed complete analysis of transaction resulting in long term capital gain as well as short term capital gains. In such circumstances, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect expenses u/s. 14A of the Act. The relevant ground raised in CO No. 155/K/2010 reads as under: "1. For that the Ld. C.I.T. (A), while confirming the disallowance of Rs. 1,17,271/- made by the assessing officer u/s 14A of the Income Tax Act on account of indirect expenses other than interest, erred in law in not holding such disallowance as unlawful to the extent it exceeded the actual amount of expenses claimed by the appellant, which aggregated to Rs. 71,393/- only. 2. For that, without prejudice to the above, the Ld. C.l.T.(A), while upholding the disallowances u/s 14A on the basis of computation made under Rule 8D (2) (ii)and (iii), was unjustified in not directing the assessing officer to recompute such disallowances as the calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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