TMI Blog2015 (6) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 45(2) of the Act. We find that this issue is covered by the decision of ACIT Vs. Bright Star Investment Pvt. Ltd.,[2008 (7) TMI 442 - ITAT BOMBAY-H]. In view of the above, we find no infirmity in the order of CIT(A) 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 - Decided in favour of assessee. Disallowance of Foreign travel expenses of Director - CIT(A) deleted addition - Held that:- since domestic and foreign travelling of Mrs. Madhurika Khaitan an executive and employee of the company was for the purpose of business promotion. Therefore, the addition made by the A.O. on this ground is not sustainable. - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 of the AO. in the assessment order and submission filed by the AR. on different grounds of appeal. In the first ground where the assessee has converted the trading stock into investment, the finding of the A.O. is that Sec. 45 (2) of the I.T. Act provides about conversion of investment to stock but there is no provision fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 capital asset into or its treatment by him as stock in trade of a business carried on by him, shall be chargeable to tax as the income from the previous year in which such stock in trade is sold or otherwise transferred by him, and for the purpose of section 48, fair market value of the asset on the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 between the sale price of the shares and this cost of acquisition of share, which is the book value on the date of conversion with indexation from the date of conversion, should be computed as a capital gain. In the absence of a specific provision, out of these two formulas, the formula which is favourabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 case. The second ground of appeal is regarding disallowance of ₹ 2,21,117/- on account of foreign and domestic travel by Mrs. Madhurika Khaitan. The A.O. in the assessment order has given his findings that Mrs. Madhuriaka Khaitan was a nonexecutive director of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 submitted ATG Certificate of the donee Durga Prasad Khaitan Charitable Trust along with a receipt of donation of ₹ 50,000/-. According to us, this is new evidence, which requires verification. Ld. Counsel for the assessee also not objected to the same. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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