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TMI Blog2017 (10) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... e grounds of appeal read as follows:- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO amounting to Rs. 23,28,423/- on account of Foreign Travel Expenses. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the income from sale of shares amounting to Rs. 1,21,01,161/- assessed by the A.O. as business income should be assessed as STCG. 2.1 Facts leading to the same are that the assessee being resident individual and lawyer by profession was assessed u/s 143(3)(ii) for impugned AY on 31/12/2010 at Rs. 5,42,91,161/- after certain additions / adjustments/ disallowances as against returned income of Rs. 4,82,20,681/- e- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of less than 180 days. Further, in 40.5% of the transaction, the holding period was less than month and in 96% of the transactions, the holding period was less than 180 days. Further the assessee carried out repetitive transactions and therefore, the transactions were undertaken with the intention of trading in shares and not to be kept as investments. Resultantly, Ld. AO treated the gains as profit from trading of share which was assessable under head 'Business Income'. Consequentially, the assessee was denied the set-off of Short Term Capital Loss incurred by him during the year from the same and also saddled with higher rate of tax on Share Income as against concessional rate of tax @10% as applicable to Short Term Capital Gain. 2.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharge. Regarding treatment of Share Income, reliance was placed on the finding of Ld. AO. 4. Per Contra, Ld. AR drew our attention to the fact that the assessee is lawyer by profession and required to make frequent visit to foreign countries so as to attend various seminars / conferences etc. for the purpose of enhancing / sharing professional knowledge and therefore, the impugned expenses were incurred for the professional purposes. Our attention is drawn to the fact that foreign visit was a regular feature of assessee's profession and these expenses are being incurred year on year basis by the assessee and the Assessing Officer, in several other years accepted the same barring certain adhoc disallowance against the same to factorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Assessment Year is a unique unit of assessment and principle of resjudicata do not apply to Income Tax Proceedings. The primary conditions of claiming the expenses, in terms of Section 37, is that the expenses have been incurred wholly and exclusively for the purpose of Business or profession. Although, the assessee has placed relevant invoices and relevant ledger extracts, however, no details of any conferences / seminars are available on record. Therefore, on the basis of material available on record, the primary condition of claiming the same, in our opinion, has remained unfulfilled. The Ld. AR has contended that the assessee could not establish / demonstrate the same for want of time. Therefore, without delving much deeper in the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s substantial; (iv) Whether transaction were entered into continuously and regularly during the assessment year. (v) Whether purchases are made out of own funds or borrowings; (vi) The stated objects in the Memorandum and Articles of Association in the case of corporate assessee; (vii) Typical holding period for securities bought and sold; (viii) Ratio of sales to purchase and holding. (ix) The time devoted to the activity and the extent to which it is the means of livelihood. (x) The characterization of securities in the books of account and balance sheet as stock-intrade or investment. (xi) Whether the securities purchased or sold are listed or unlisted. (xii) Whether investment is in sister/related concerns or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT. Further Apex Court in CIT v. Associated Industrial Development Co. (P.) Ltd. [1971] 82 ITR 586 (SC) has observed that:- "Whether a particular holding of shares is by way of investment or forms part of the stock-intrade is a matter which is within the knowledge of the assessee who holds the shares and it should, in normal circumstances, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares which are its stock-in-trade and those which are held by way of investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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