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2015 (10) TMI 537 - ITAT AHMEDABAD

2015 (10) TMI 537 - ITAT AHMEDABAD - TMI - Gains on sale of shares - capital gain v/s business income - Held that:- We find while holding the gains on sale of shares to be capital gains, ld. CIT(A) has given a finding that the facts of the case in the year under appeal are identical to that of A.Y. 05-06 & 07-08 and further during the year under appeal the number of transactions are small, the shares were purchased for investment purpose and were not made out to borrowed funds. Before us, Revenu .....

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of Revenue is dismissed. - Decided in favour of assessee.

Disallowance u/s 14A - Held that:- CIT(A) while upholding the disallowance u/s. 14A made by A.O, has given a finding that during the appellate proceedings, Assessee had not challenged the computation of disallowance and the disallowance made by the A.O was as per provisions of Section 14A read with Rule 8D of I.T. Rules, 1962. Before us, ld. A.R. has not brought any material on record to controvert the findings of ld. CIT(A) an .....

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d 19.10.2011 for A.Y. 2008-09. 2. The relevant facts as culled out from the material on record are as under. 3. Assessee is an individual stated to be deriving income from salary, business, capital gains and other sources. Assessee filed her return of income for A.Y. A.Y. 2008-09 on 06.10.2008 declaring total income of ₹ 3,31,270/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 01.11.2010 and the total income was determine .....

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he impugned amounts as Short Term Capital Gain and Long Term Capital Gain, and not as 'Business Income'. 4. On the other hand the grounds raised by the Assessee reads as under:- 1. The Learned Commissioner of Income Tax (Appeals) has erred in confirming the disallowance of ₹ 6,79,793/- made by the Assessing Officer u/s.14A of the I.T. Act, 1961 We first take up Revenue s appeal (in ITA No. 3296/Ahd/2011). 5. During the course of assessment proceedings, A.O noticed that Assessee had .....

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inst capital gain s considered by the Assessee. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who deleted the addition by holding as under:- 3.3 It is seen that in the year 2005-06 and 2007-08, the Id, CIT(A) had given relief to the appellant on the same set of facts. For the sake of brevity, observations made in A.Y. 2007-08 in appeal no. CIT(A)-XI/959/9-10 dated 19-11 -2010 are reproduced as under: "4.2 I have considered the submissions made by the A.R. of .....

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purchase weigh in appellant's favour. The case laws relief on by the A.O. are distinguishable on facts. I am of the considered view that no adverse inference can be drawn from the facts of appellant being the niece of the founder of reliance group and her dealing primarily in the shares of Reliance group of companies. Thus, given the facts of the case, the case laws relied on by the appellant and following my decision in appellant's case for the immediately preceding A.Y, 2006-07 vide or .....

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al gain. In addition to the above decisions, I also rely on the following facts in the case of appellant: (1)Appellant has regularly declared the income from the sales of shares under the heads short term capital gain and long term capital gain. The declaration of investments is formalized in the return of income of earlier years, This is a clear proof that shares are purchased for investment purpose. (2) Investment has not been made out of borrowed funds. (3) The appellant has traded only in th .....

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wed. 6. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us. 7. Before us, the ld. D.R. supported the order of A.O. He also placed reliance on the decision in the case of Manojkumar Samdaria vs. CIT reported in 2014 52 Taxman.com 247 (SC). On the other hand ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that Assessee had indulged in selling of shares only on 20 days in a year and the investments were in 14 to 15 scrips. Wit .....

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gains to be of short term he submitted that the shares were purchased from October 2006 to July 2007 and the shares have been held for nearly 7 months. He further submitted that the facts of the case in the year are identical to that of earlier years and in view of the decision of Hon ble High Court no interference to the order by ld. CIT(A) is called for. The ld. A.R. further submitted that the facts of the case in the case of Manojkumar Samdaria (supra) relied upon by ld. D.R. are distinguisha .....

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shares to be capital gains, ld. CIT(A) has given a finding that the facts of the case in the year under appeal are identical to that of A.Y. 05-06 & 07-08 and further during the year under appeal the number of transactions are small, the shares were purchased for investment purpose and were not made out to borrowed funds. Before us, Revenue has not brought any material to controvert the findings of ld. CIT(A). We further find that against the order of Tribunal, the matter was carried by Reve .....

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rse of assessment proceedings, A.O noticed that Assessee had shown huge investment of ₹ 14.03 crore but had disallowed only ₹ 72,389/- u/s. 14A of the Act. A.O was of the view that the disallowance made by the Assessee was not in accordance with Rule 8D. He therefore worked out the disallowance u/s. 14A at ₹ 7,52,128/- and after giving the credit of ₹ 72,389/- that was suo motu disallowed by Assessee, disallowed ₹ 6,79,739/-. Aggrieved by the order of A.O., Assessee .....

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se cases is not going to help his case. 5.3 During the appellate proceedings, the appellant has made very general submission. The appellant has failed to prove with documentary evidences that borrowed money was not utilized for the purpose of investment in stock/mutual funds. The assessee's submission that it has not incurred any expenditure in relation to the income which does not form part of the total income under this Act is not accepted in view of the provisions of section 14A(3) of the .....

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