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TMI Blog2017 (1) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... Laxmi Nagar, New Delhi for assessment year 2008-09. 2. The grounds of appeal raised by the Revenue in ITA No.5178/Del/2012 are as under: "1. Whether the CIT(A) under the facts and circumstances of the case and in law was justified in holding that profit of Rs. 35,14,66,127/- earned by the assessee on sale of shares is short term capital gain and not business income. 2. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of hearing of the appeal." 3. The grounds of appeal raised by the assessee in ITA No. 5029/Del/2012 are as under: "1. The learned CIT(A) has erred, in law and facts, in confirming the disallowance u/s 14A amounting to Rs. 760,000/-, without giving due consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and business activity (ii) turnover in the share was to the tune of Rs. 69, 06, 09, 30, 892/- (iii) the assessee was frequently trading in a particular scrip and the intention was to earn profit and not dividend, otherwise the assessee would have held the shares for a longer period. (iv) In the assessment year 2007-08, the assessee himself treated the income from buying and selling of securities under the head "profit and gains of business and profession". 4.1 After analyzing the ratio of the decision on the issue, the Assessing Officer held the activities of buying and selling of shares carried out with assessee is business activity as against short term capital gain declared by the assessee. The Assessing Officer also made disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of shares as the business activity. In respect of the ground No. 1 raised by the assessee in its appeal, the learned Sr. Departmental Representative relied on the order of the learned Commissioner of Income-tax (Appeals) and submitted that disallowance confirmed for administrative expenses under Rule 8D(2)(iii) was justified. In respect of the ground No. 2, the learned Sr. Departmental Representative submitted that penalty under section 271(1)(c) of the Act, was merely initiated in the order and not levied and, therefore, ground was premature and liable to be dismissed as infructuous. 7. We have heard the submission of the learned Sr. Departmental Representative and perused the relevant material on record. As far as the ground in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less than a month time. Shares of M/s NITO Ltd. were purchased on 8th May, 2007 and sold on 30th May, 2007, Omaxe Ltd. shares were purchased on 2nd August, 2007 and sold on 20.07.2007. * The shares of DLF Ltd. were purchased on 21, 22, 23,and 24th January, 2008 and if we have a close look on sale pattern then we found that the shares were sold 4th and 5th February, 2008 means the assessee company were making transactions like a business dealing. Similarly, shares of this company purchased on 8th and 11th February were again sold between 13 to 27 February, 2008 on 8 occasions. * The shares of Reliance Energy Ltd. were purchased on 15th February, 2008 and 24th March, 2008 were sold within 10 days and secondly on the very next days of pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome and all expenses have been incurred for Business purposes. However, it is seen from the balance sheet that average investments in the. case of appellant comes to Rs. 15,20,00,000/-, therefore, disallowance on account of administrative expenses equal to 0.5% of average investment has to be made in view of clause-(ii) of Rule 8D(2) of the IT Rule 1962. It is observed that earning of exempt income is not a passive activity. In the present age of making of investment, maintaining or continuing with investment and time of exit from the investment are well informed and well coordinated management decision involving not only inputs from various sources but also acumen of senior management functionaries. Therefore, cost is inbuilt even in so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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