TMI Blog2017 (3) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... not shown incorrect. However record shows that, Assessee admitted that from A.Y. 1994-95 it has started business of shares dealings and speculation in shares. The stock of shares held by him, why should not become stock in trade income, and same thereof be treated as business income, we find no consideration by Tribunal on this aspect. The matter require reconsideration in light of the aforesaid fact by Tribunal and question no. 1 would depend on aforesaid finding recorded by Tribunal. Disallowance of interest payment - Held that:- Similar question has been considered by this Court Commissioner of Income Tax Central Vs M/S Jai Prakash Industries Pvt. Ltd. [2017 (3) TMI 1160 - ALLAHABAD HIGH COURT] as answered in favour of Assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion no. 1 in Income Tax Appeal no. 100 of 2005. Therefore, we are reproducing herein two substantial questions of law raised in Income Tax Appeal no. 100 of 2005:- (i) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal erred in law in directing that the income arising on the sale of shares of M/s Jai Prakash Industries Ltd. was to be computed under the head 'capital gains' even though the respondent indulged in frequent purchase and sale of shares with a view to earn profits through trading transactions and the conduct of the respondent showed that it was carrying on business in shares, and as such the income arising from such transaction was liable to be assessed as the business income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -51728294 speculation loss 89,57,710 27.02.1998 -20318417 1996-97 30.10.1996 -4758331 23.03.1999 Nil 6. In all the three A.Y.s' Assessee had shown profit on sale of shares (long term). Assessee claimed that shares of M/s Jai Prakash Industries Ltd. were acquired as investment in 1990-93 and it is not doing business in sale and purchase of shares, therefore entitled for long/short term capital gain. Assessing Authority (hereinafter referred to as the 'A.A. ) did not agree and held that Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that Assessee is engaged in business of construction, contract work, hiring of construction equipment and machineries and structural and building work etc. Though A.A. has said that there was a frequent transaction in shares but we find no details thereof in any assessment order of all three years. In assessment order dated 07.06.1996 for A.Y. 1994-95, A.A. has also observed that since after incorporation, Assessee mainly carried on business of construction, contract work, hiring of construction equipments and machineries and structural and building work etc. Assessee became a major partner of M/s Raj Kumar Singh Co. w.e.f. 01.11.1985. The said firm also carried on the work of construction contracts on a very large scale, as Sub-Contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s short term capital gain . Assessee never treated or converted its investment in shares into stock in trade but then from A.Y. 1994-95 started business of shares dealings and speculation in shares. 14. It is in this backdrop that in assessment orders in question CIT (A) held that shares of M/s Jai Prakash Industries Pvt. Ltd. held by Assessee as investment, and profit received therefrom, would be capital gain (long term/short term as the case may be). 15. Tribunal has also recorded a finding that A.A. did not state anything in assessment orders as to on what basis it held that shares held by Assessee are stock in trade though throughout, the same were shown in respective balance sheets, as investment. 16. Before us also it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove that Assessee had advanced interest bearing funds to these persons. 20. It is in these facts and circumstances and factual backdrop that CIT (A) and Tribunal accepted plea of Assessee and held that disallowance of interest payment is unjustified. 21. Learned counsel for parties, stated that a similar question has been considered by this Court in Income Tax Appeal No. 87 of 2008 (Commissioner of Income Tax Central Vs M/S Jai Prakash Industries Pvt. Ltd.) decided on 24.01.2017 and in the light of similar factual backdrop, this question is answered in favour of Assessee and against Revenue for the reasons discussed above as also reasons contained in the judgment dated 24.01.2017 in Income Tax Appeal No. 87 of 2008 (supra). We an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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