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TMI Blog2017 (12) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3)/263/143(3) of the Income Tax Act, 1961, (hereinafter referred to as the 'Act'), dated 31.01.2014. 2. Since these two cross-appeals relate to same assessee, same Assessment Year, identical issues involved, therefore, these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 3. The grounds of appeal raised by the assessee in ITA no.2265/Kol/2014, are as follows: "1.That the ld. Commissioner of Income Tax(Appeal)-XXX has erred in law and in facts in treating a sum of Rs. 380455/- as business income which in fact and law is part of short term capital gain of Rs. 6094446/- derived by the assessee during previous year relevant to Assessment Year 2008-09. (para1 at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round of appeal." 5. Ground No. 1 and 2 raised by the assessee in ITA No. 2265/kol/14 are identical with ground No.1 and 2 raised by the Revenue in ITA No.27/kol/15 therefore these are being adjudicated together. The main grievance of the assessee in these grounds is that amount of Rs. 3,80,455/- was not a business income and it was part of short term capital gain of Rs. 60,94,446/- 6.The brief facts qua the issue are that the assessee filed its Return of income for the assessment year 2008-09 declaring a total income of Rs. 68,02,415/- and the same was assessed u/s 143(3) of the Income Tax Act, 1961 on 02.11.2010 with assessed income of Rs. 68,92,560/-. Subsequently, the ld. CIT(A) had exercised its jurisdiction u/s 263 of the I. T Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer led to the conclusion that purchase and sale of shares by the assessee constituted an activity in the nature of business. Therefore, the Assessing Officer asked the assessee that income from the purchase and sale of shares should be considered in the nature of business or trade as against the claim of investment. During the assessment proceedings, the assessee submitted that during the relevant assessment year short-term capital gain of Rs. 60,94,446 was arised on purchase and sale of reputed blue chip companies shares including Govt. and semi-govt. companies. The purchase and sale of share were not the business of the assessee but to invest surplus money into capital market. The gain was arised due to the rarest opportunity, an unima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee had also pointed out that from Assessment Year 2005-06 to 2007-08, the assessments had been completed U/s 143(3)/ 143(1) of the Act, and the Department had been accepting the said account of income as short-term capital gain,(vide P.B 32). 9. On the other hand, the Ld. DR for the revenue has primarily reiterated the stand taken by the AO, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 10. Having heard the rival submissions, perused the materials available on record, we are of the view that in assessee's case under consideration, the Department had been accepting the same account of income as short-term capital gain in assessment years 2005-06 to 2007-08. We note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source on the amount paid as interest. The AO noted that the said expenditures were indeed debited in his income/Expenditure a/c. Further, it was also established fact that the assessee had business income in excess of the limit stated in the sec,44AB of the Act. Therefore, the interest paid on loan was liable to be deducted tax at source as per proviso of sec. 194A. Failure to deduct tax at source invokes the proviso of sec. 194A and the provisions of sec. 40(a)(ia) of the Act, therefore AO disallowed such expenses of Rs. 2,06,691/- added back to the income of the assessee. 14.The counsel for the assessee submitted before us that section, 44AB is not applicable, because the assessee has always acted as Investor in shares, This fact was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that no documentary evidence had been produced as to what were the drawings of other members of the family. A mere statement will not hold good. The Counsel submitted that during the year under consideration the assessee had drawn a sum of Rs,281000/- for drawing and his other family members had following withdrawals. i) Smt. KusumSaraf-Wife Rs.84000.00 ii) Abhishek Saraf-Son Rs.98958.00 iii) Aditya Saraf-Son Rs.96000.00 Total = Rs.278958.00 Thus the total drawing comes to Rs. 5,59,958/- It was explained to A.O. that total withdrawal by assessee and by other family members is sufficient to cover house hold expenses. All family members are assessed to Income Tax. Since all members are staying in a joint family, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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