9911796707
TMI Blog2017 (8) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax (Appeals) erred in confirming the order of the Learned Assessing Officer in treating profit on sale of shares to the time of Rs. 92,38,459/- which are squared off within 6 months as Business Income as against ''Short Term Capital Gain'' as claimed by the appellant.Appellant submits that in view of facts and circumstances of the case as well as in law the said treatment of profit on sale of shares as Business Income as against Short Term Capital Gain on sale of shares as claimed by the 2 appellant is bad in law and the said profit ought to have been taxed as short term capital gain on sale of shares. ii. Learned Commissioner of Income Tax (Appeals) erred in confirming the order of learned Assessing Officer erred in disallowing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Bombay High Court in assessee's own case i.e. CIT vs. Dr. Ramesh C. Shah (ITA No. 1063 of 2011) and order of the 3 Tribunal in (i) Ramesh C. Shah vs. Addl. CIT (ITA No. 1553/Mum/2013) for the A.Y. 2009-10, (ii) ACIT vs. Dr. Ramesh C. Shah (ITA No. 727/Mum/2012) for the A.Y. 2008-09 and (iii) DCIT vs. Dr. Ramesh C. Shah (ITA No. 2234/Mum/2008) for the A.Y. 2004-05. 3.2 On the other hand, the learned DR relied on the order of the learned CIT(A). 3.3 We have heard the rival submissions and perused the relevant material on record. We find that the assessee has been investing in shares for the last more than ten years. He has always shown the shares purchased as 'Investment' in the balance sheet for all the years and valued the same at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dividend earned was Rs. 8.36 lacs on the investment of Rs. 2.77 crores also establishes that the intention of the respondent was to earn dividend income. Moreover, as observed by the CIT(A) the respondent-assessee was a busy Doctor and would not have time to deal in share transaction on day to day basis. Thus, the Tribunal on the above facts concluded that income earned on sale of shares held for less than six months are to be taxed under the head Capital Gain. Moreover, we are informed that even for the earlier assessment years gain on sale of shares has been taxed by the revenue as short term capital gain and not as business income. In view of the fact that the decision of the Tribunal taxing the gain made on sale of shares under the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing proportionate interest does not arise. It was stated that loan from Standard Chartered Bank was specifically for purchase of Nursing Home at Borivili. Also loan from ICICI Bank was specifically for purchase of car used in the profession of the assessee. Other private loans were utilised for professional purpose. However, the AO was not convinced with the above explanation of the assessee and made a disallowance of Rs. 7,11,594/- u/s 14A r.w. Rule 8D. On appeal the learned CIT(A) agreed with the above computation of the AO and confirmed the same. 4.1 Before us, the learned counsel of the assessee submits that it has been held by the Hon'ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. vs. DCIT (2010) 328 ITR 81(Bom) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above case it upheld the disallowance to the extent to 2% of the total exempt income. 4.4 Respectfully following the above decision, we direct the AO to restrict the disallowance to 2% of the total exempt income. Thus the second ground of appeal is partly allowed. 7 5. We come to 3rd ground of appeal. It relates to the disallowance of Rs. 1,93,737/- made by the AO u/s 94(7) out of business loss claimed by the assessee on the plea that the loss incurred on sale of securities to the extent of dividend income earned is not allowable, which was confirmed by the learned CIT(A). 5.1 The learned counsel of the assessee submits that if the loss is treated as Short Term Capital Loss (STCL) then the said loss ought to be disallowed to the extent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us, the learned counsel of the assessee submits that in the present case the assessee had sufficient own funds at his disposal for advancing interest free loans. It is stated by him that 99.46% of the total funds at his disposal are own funds. It is submitted that all funds have gone into common pool of funds and nexus with interest bearing funds having been utilised for advancing interest free loan cannot be established. However, as almost 99.46% of funds are interest free funds, considering loan is advanced not out of 99.46% of funds but out of 0.32% of funds is devoid of rationality. Reliance was placed by him on the judgement of the Hon'ble Bombay High Court in CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340. On the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
