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2015 (8) TMI 1312

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..... ts of the case, it is very clear that the respondent assessee company from the beginning held the shares under investment portfolio the same is treated as investments in the books of account and where the shares are held for trading purposes the profit arising there on is offered to taxed under the business head. Disallowance of interest - Held that:- From the order of CIT(A), it is very clear that the CIT(A) had made a bifurcation between the investment portfolio and trading portfolio and therefore, the same is in line with the provisions of sec. 14A read with Rule 8D of the Income Tax Rules, 1962. Thus, we do not find any reason to interfere with the reasoning given by the CIT(A). Accordingly, the second ground raised by the Revenue is .....

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..... s and in the circumstances of the case, the Ld. CIT(A) has erred in directing the AO to allow proportionate claim out of security transaction tax payment incurred in respect of business income of ₹ 2,17,10,019/- 3. In ITA No. 2553/Del/2011 for AY 2007-08, following grounds of appeal has been raised: i. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that profit on sale of shares held for less than thirty days would constitute business income and the remaining such profit would constitute capital gains and thereby deciding that out of the profit of ₹ 1,02,92,943/- from share transactions treated by the AO as business income, lonely ₹ 54,85,307/- would be business income and .....

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..... wever, because of its inability to comply with the stringent requirements of SEBI it was decided to trade only in commodities and derivatives features etc. on NSE, BSE NCDEX apart from investing surplus funds in the stock market with a view to enjoying the appreciation in capital values. For the assessment years 2006-07and 2007-08, the returns of income were filed on 28th March, 2007 and 29th March, 2008, disclosing incomes of ₹ 5,30,89,757/- and ₹ 2,20,03,920/- respectively. The case was selected for scrutiny assessment and finally the assessments were completed for the assessment years 2006-07 and 2007-08 vide orders dated 30th December, 2008 and 29th December, 2009 respectively passed under Section 143(3) of the Income-tax .....

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..... h the present appeals. 5. The learned DR vehemently argued that since the respondent assessee company s main business is trading in stocks and derivatives features, the entire income arisen from these transactions should be treated as a trading income. 6. On the other hand, the learned counsel had submitted that simply because the assessee s main business is trading, the whole profit cannot be taxed under the business head. He further submitted that any assessee is entitled to maintain two different portfolios i.e. trading and investment portfolio and this principle is recognized by CBDT in its Circular No. 4 of 2007, dated 15th June, 2007. He also relied on the case of PVS Raju Vs. ACIT, Hyderabad, [2012] 18 taxmann.com 9 (AP). .....

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..... t in the case of G. Venkataswami Naidu CIT, 35 ITR 594, held that in order to determine whether the transactions of purchase amount to adventure in the name of trade or not, the intention of the parties at the time of purchase is material. This principle has been reiterated subsequently by Hon ble Apex Court in the case of CIT Vs. Holck Larsen (H.), 160 ITR 67 (SC) and Hon ble Delhi High Court decision in the case of CIT Vs. Raunaq Singh Swaran Singh, 85 ITR 220 . Therefore, from these decisions it is clear that the intention alone is the material factor to determine whether a particular share is held as investment or trading portfolio. In order to find out the intention of the parties, one is to look at the treatment given in .....

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