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TMI Blog2015 (6) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... is against the order of CIT(A) in deleting the addition made by AO on account of profit arising from sale of share dealing as business income as against declared by assessee as Short term Capital Gains. For this, revenue has raised following ground no.1: "1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in treating the profit resulted from share dealings as short term capital gains in stea of business income." 3. Briefly stated facts are that the AO treated the sale of shares as business income as against declared by the assessee as short term capital gains. Aggrieved assessee preferred appeal before CIT(A), who deleted the addition by observing in para 4 as under: "4. I have gone through the findings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. in IT Appeal Nos. 6374 & 9543 (Mum) of 2004 A.Y. 2000-01 & 2001-02. The relevant portion of the Tribunal's observation is as follows: "Having heard the rival submissions and from careful perusal of the record, we find that the shares held in stock in trade were converted into investment at the book value shown in the books of account. Later on, the shares held in investment were sold and the assessee offered the capital gain accrued on the sale of shares. Admittedly, the provisions of section 45(2) of the Income Tax Act, deals with the issue of capital gain where the investment is converted into stock in trade. According to this section, the profits or gains arising from the transfer by way of conversion by the owner of a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the absence of a specific provision to deal with the present situation, two formulas can be evolved to work out the profits and gains on transfer of the assets. One formula which has been adopted by the assessing officer i.e. difference between the book value of the shares and the market value of the shares on the date of conversion should be taken as a business income and the difference between the book value of the shares and the market value of the shares on the date of conversion should be taken as a business income and the difference between the sale price of the shares and the market value of the shares on the date of conversion be taken as a capital gain. The other formula which is adopted by the assessee i.e. the difference bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investment Pvt. Ltd., cited supra. In view of the above, we find no infirmity in the order of CIT(A) and the same is confirmed. This issue of revenue's appeal is dismissed. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on account of foreign travel expenses of Director. For this, revenue has raised following ground no.2 "2. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition on account of foreign and domestic travel made non-executive director despite the fact that the same was not incurred wholly and exclusively for the purpose of business." 6. We have heard rival submissions and gone through facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ground is allowed. Hence, ground no. 2 is allowed." In view of the above facts and circumstances of the case, we find no infirmity in the order of CIT(A) and hence, the same is confirmed. This issue of revenue's appeal is dismissed. 7. The next ground in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on account of donation by admitting fresh evidence. For this, revenue has raised following ground no.3: "3. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition towards donation by admitting fresh evidence in violation of Rule 46A." 8. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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