TMI Blog2016 (8) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 72.32 lacs. He was therefore of the opinion that looking to the balance sheet in the earlier years as investment and the period of holding of the shares and also that the assessee had invested its own funds and not used borrowed funds for purchase of shares, the sale of shares cannot be taxed as business income. We are in agreement with the view expressed by the Commissioner of Incometax (Appeals) and the Tribunal. Looking to the period for which the shares were held, the number of transactions, the fact that the shares were shown as investments in the books of the assessee since long and that the assessee had not utilized any funds borrowed from purchase of the share, the Assessing Officer committed error in treating the shares as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act by totally overlooking Rule 8D of the Income Tax Rules, which should be deemed to have come into effect from the very inception of Section 14A of the Act. 2. Insofar as questionA is concerned, we notice that Division Bench of this Court in case of Commissioner of Incometax v. Kalptaru Power Transmission Co. Ltd., reported in [2014] 42 taxmann.com 104 (Guj) relying on the decision of the Supreme Court in the case of Commissioner of Income Tax v. Lakshmi Machine Works, reported in 290 ITR 667 has held the issue in favour of the assessee and against the Revenue making following observations. 7. Applying ratio laid down by the Honble Supreme Court in the case of Lakshmi Machine Works (Supra) and Shiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. This leads us to the sole surviving questionB which pertains to the treatment that the income derived by the assessee from sale of shares should be accorded. For the assessment year 2004-05, the assessee has sold certain shares and claimed long term capital gain on the sale proceeds. The Assessing Officer however, treated such income as business income, observing that the assessee had held majority of shares for a period less than one year. The scale of activities is also substantial. The main business of the assessee was of manufacturing detergent cakes and not investment in shares. 6. Assessee carried the matter before the Commissioner of Income tax (Appeals) who deleted the additions observing as under: 3.2 I have carefully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown in the balancesheet with effect from 01/02/2003. Therefore, the view taken by the first appellant authority; which appears to have been taken after due verification of the records of the case, need not to be disturbed. An another finding of facts was that the above investments were not out of the borrowed funds, but out of the cash surplus available with the assessee. Though no one was present from the side of the respondent-assessee, but as far as the question of the Revenue's appeal is concerned, since no contrary evidence pertaining to those findings on facts is before us therefore, we hereby upheld those findings and dismiss this ground. 8. From the materials on record, it can be seen that the Assessing Officer without r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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