Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

ACIT, Circle 18 (1) , New Delhi Versus Utkal Investments Ltd.

2015 (9) TMI 1300 - ITAT DELHI

Long term capital loss - investment in shares - exemption u/s 10(38) - CIT(A) allowed the carry forward of loss to the appellant instead of setting it off against the exempt income u/s.10(38) - Held that:- Clause (b) of sub section (1) of section 74 provide that in so far as capital loss relate to capital asset, it shall be set off against income, if any, under the head “Capital gains” assessable for that assessment year in respect of any other capital asset not being a short term capital asset .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

come exempt u/s 10(38) of the Income Tax Act, 1961. We do not find any infirmity in the order passed by the Ld. CIT(A) in allowing the carry forward of loss in view of the discussion above. - Decided against revenue. - I.T.A .No. 917/Del/2013 - Dated:- 4-9-2015 - SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER. JJ. For The Appellant : Sh. Vivek Wadekar, CIT DR For The Respondent : Sh. M.L, Dujari, CA ORDER PER BEENA PILLAI, JUDICIAL MEMBER: This is an appeal filed by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng of this appeal. 2. Brief facts of the case are that assessee is in the business of carrying on the activity of investments and to invest in and acquire shares, hold shares, stocks and debentures, stick bonds and securities and to carry on the business of financers and advancing loans. 3. The assessee filed its return of income declaring ₹ 1,33,77,935/-. The case was selected for scrutiny and notice u/s.143(2) was issued. The assessing officer completed assessment by treating capital gai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al loss and consequently did not allow the carry forward of the said loss. The ld. A.O further set off the long term capital loss against the income not forming part of the total income. 5. The ld. CIT(A) vide his order dated 07.11.2012, allowed the carry forward of loss to the appellant instead of setting it off against the exempt income u/s.10(38) of the Act. 6. Aggrieved by this order of the Ld. CIT(A) the Revenue is in appeal before us. 7. The ld. DR in his arguments supports the order passe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

board resolutions passed by the board of directors. 10. It has been observed by us from the records that the ld. CIT(A) in the appellate proceedings against the assessment order, had forwarded the written submissions filed by the assessee to ld. A.O for remand report. The ld. A.O submitted the remand report on 23.03.2010wherin he has virtually relied upon the contentions raised in the assessment order and nothing new has been said or brought on record. 11. On perusal of the order dated 28.02.201 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ese activities and had been valuing its investment and inventory in the like manner. In its Balance Sheets from year to year and tax audit reports quantitative information in respect of the shares traded has been given. Assessments for assessment years 2001-02, 2003-04, 2004-05 and 2005-06 have been made u/s 143(3) of the Income Tax Act, 1961 and consistently this position has been accepted by the Income Tax Department. b) In the year under consideration the assessee filed its Return of Income i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o declared dividend income exempt u/s 10(34)/35 ₹ 3,51,49,900/- In the computation of income brought forward unabsorbed losses were also declared as under: i) Business losses ₹ 64,14,925/- ii) Speculative losses ₹ 47,51,109/- Interest income received from the activity of advancing loans amounting to ₹ 18,47,672/- was returned as income from business as in the past. c) The Assessing Officer while completing assessment treated capital gains as business income for the reason .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

capital gains on which tax is chargeable u/s 111A of the Income Tax Act, 1961. From these details it is abundantly clear that many items of realization of shares and securities are out of the shares and securities held as investment on 31st March, 2005. f) It was accordingly emphasized that the assessee company is having two portfolios, i.e., Investment Portfolio comprising of securities which are treated as capital assets and Trading Portfolio comprising of stock in trade which is treated as t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h Court has held as under: There is no doubt that even a single transaction can be in the nature of trade but the assessee has demonstrated that his intention was never to trade in shares. The intention is manifested by treatment given to such investment that the investment is out of own fund and not borrowed that the investment is not rotated frequently, that the total number of transactions are very few, that all the shares purchased are not sold and rather held for quite number of days. It is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ich is to be assessed as business income. In all such cases the intention is manifested by the assessee himself by his conduct and other relevant factors as considered by the ld. CIT(Appeals). It is also seen that the shares were treated as investment in earlier year and which fact has been accepted by the AO. The assessee has also earned huge dividend income from such shares. The AO merely because of the total volume of transaction is substantial, is guided to hold the income as business income .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ll payment for such investment. In such circumstances, the transactions are to be treated as giving rise to the capital gain and cannot be branded as trading of making investment so as to determine whether the transaction was for dealing in shares or making investment for earning dividend and appreciation from such investment. h) The ld. CIT(A) decided the issue as under: Considering the totality and peculiarity of the facts of this case, we find that assessee is neither fully acting as a trader .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

investor. Accordingly, we decide following criteria to hold when gains are to be taxed as profit to be earned under the business or to be taxed as short term capital gain, we hold that if shares are not held even say for a month, then the intention is clearly to reap profit by acting as a trader and he did not intend to hold them in investment portfolio. We believe that if a person intends to hold his purchases of shares as investment, he would watch the fluctuation of rates in the market for w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

whether it should be treated as stock in trade treating it as a business income or investment so as to treat it as capital gain. j) In view of the above discussion the bifurcation of the shares held for less 30 days on the basis of working given by Managing Director of assessee company vide letter dated 6.12.2010. Particulars Amount Short term capital gain @ 30% Short term capital gain @ 10% Own shares (Bonus shares and/or Right issue shares) 21,53,221/- Own shares (Others) 3,34,881/- PMS Shares .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f it, after proper verification and to allow the claim of appellant. 13. It has been recorded by the ld. CIT(A) that the accounts of the company are prepared in accordance with Schedule VI of the Companies Act, 1956 which do not require preparation of a separate trading account. 14. The ld. CIT(A) had passed the order with specific directions and to allow the set off in accordance with the provisions of sec.74 of the Act. However the ld. A.O failed to comply with the direction into and has worke .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version