TMI Blog2017 (12) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee has not claimed deduction of interest. So there is no question of making addition. The borrowings were not utilized in acquisition of shares. As the transactions of shares have mostly been treated as done on investment account, therefore, there is no basis for addition of interest u/s.40(a)(ia) and hence we confirm the order passed by CIT(A). Addition on account of low drawing by the assessee - Held that:- A.O. has not brought on record unusually high level of standard of living, if any. In the family of 4-5 persons drawing aggregating to ₹ 5,59,958/- appears reasonable on the facts on record. Therefore, considering the factual position, we do not find any infirmity in the order passed by the CIT(A), therefore, we confirm the order passed by the CIT(A). - ITA No.2265/Kol/2014 And ITA No.27/Kol/2015 - - - Dated:- 4-12-2017 - SHRI A. T. VARKEY, JM AND DR. A.L. SAINI, AM For The Assessee : Shri S.D Varma, Adv. For The Revenue : Shri Saurabh Kumar, ACIT, DR ORDER Per Dr. Arjun Lal Saini, AM: The captioned cross-appeal filed by the Assessee and Revenue, pertaining to Assessment Year 2008-09, are directed against an order passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant facts of the case. 5. For that the assessee craves the leave to add, alter, modify, include or delete any ground 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 ₹ 3,80,455/- was not a business income and it was part of short term capital gain of ₹ 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 ₹ 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 ₹ 68,92,560/-. Subsequently, the ld. CIT(A) had exercised its jurisdiction u/s 263 of the I. T Act stating that the order u/s 143(3) was erroneous in so far as it was prejudicial to the interest of revenue on theground that the A.O. failed to examine the records properly. The gist of the findings of the order u/s 263 passed by the Ld. C.I.T-XV, Kol, dated 15.03.2013 is as under: i) Failure to verify tradi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, the ld. CIT(A) noted that assessee earned income of ₹ 3,80,455/- on shares sold after holding period varying from 3 days to 90 days. Therefore, this amount of gain of ₹ 3,80,455/- was treated as business income and CIT(A) directed the AO to treat the amount of ₹ 3,80,455/- as business income. As regards the rest amount of short term capital gain of ₹ 57,13,991/- (60,94,446 3,80,455), the same was decided to be treated as short term capital gain. 8. Not being satisfied with the order of the ld. CIT(A), the assessee is in further appeal before us in respect of income of ₹ 3,80,455/-. The ld. Counsel submitted that the assessee earned income of ₹ 3,80,455/- in respect of shares sold after holding period varying from 3 days to 90 days. Therefore, this amount of gain of ₹ 3,80,455/- is to be treated as a part of the short-term capital gain. That is, the ld. Counsel pointed out that the income of ₹ 3,80,455/- was part of ₹ 60,94,446/- and therefore, it should be treated as a short-term capital gain. The Ld. Counsel for the assessee had also pointed out that from Assessment Year 2005-06 to 2007-08, the assessments had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mit 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 ₹ 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 established with reference to past assessment records and activities of the assessee. As such provisions of Sec. 194A is not applicable therefore disallowance u/s.40(a)(ia) for ₹ 209691/- is unjustified. The ld DR for the Revenue did not controvert the submissions of the ld Counsel for the assessee. 15.Having heard the rival submissions and perused the material available of record, we note that the computation of income contained in the return of income does not show any income under the head Business or Profession . The Assessee has not claimed deduction of interest. So there is no question of making addition. The borrowings were not utilized in acquis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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