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Shri Kishan Saraf Versus A.C.I.T, Cir-45, Kolkata And Vice-Versa

2017 (12) TMI 656 - ITAT KOLKATA

Nature of income - sale of shares and securities - business income or short term capital gain - Held that:- 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 the Department has been consistently accepting the assessee as an Investor and not a trader, in past assessment years therefore, we do not uphold the order of the ld. CIT(A), following th .....

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ed 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 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 a .....

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he 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 the ld. Commissioner of Income Tax (Appeals)-XXX, Kolkata in Appeal No.238/CIT(A)- XXX/Cir-45/2013-14, dated 29.10.2014, which in turn arises out of an order passed by the Assessing Officer under section 143(3)/263/143(3) of the Income Tax Ac .....

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of ₹ 380455/- as business income which in fact and law is part of short term capital gain of ₹ 6094446/- derived by the assessee during previous year relevant to Assessment Year 2008-09. (para1 at page 10 of appeal order). 2.That the ld. CIT(A)-XXX was not justified in treating short term capital gain of ₹ 380445/- (which arose for holding period varying from 3 days to 90 days as business income, ignoring the facts and assessment records of the assessee. 3.The assessee craves l .....

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that income arising out of sale of shares held up to 90 days or less is to be taxed as business income and the income arising out of sale of shares held for more than 90 days is to be taxed as capital gains. 3.For that, the Ld. CIT(A)-XXX, Kolkata has erred in law and in facts in deleting the addition of ₹ 2,09,691/- made u/s 40(a)(ia) of the Act for nondeduction TDS against payment of interest on loan. 4. For that, the Ld. CIT(A)-XXX, Kolkata has erred in law & facts in deleting the .....

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₹ 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 ord .....

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. in which assessee has substantial interest. iii) Failure to invoke provision of sec. 40(a)(ia) on non-deduction of tax at source onthe interest paid. iv) Failure to verify the loan given to wife and its consequences in view of sec. 64(1)(iv) of IT. Act. v) Failure to verify household expenses. Therefore, the ld. CIT(A) exercising the power U/s 263, had set aside the order dated 02.11.2010 only to the extent indicated in the foregoing paragraphs and directed the Assessing Officer to pass a fres .....

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t 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 ₹ 60,94,446 was arised on purchase and sale of reputed blue chip companies sha .....

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ggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT(A) who has allowed the assessee s appeal partly. During the appellate proceedings, 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 regard .....

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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 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 gai .....

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that the Department has been consistently accepting the assessee as an Investor and not a trader, in past assessment years therefore, we do not uphold the order of the ld. CIT(A), following the Rule of consistency.The revenue should follow the consistency in taxing a particular income of the assessee. For that we rely on the judgment of the Hon ble Supreme Court in RadhasoamiSatsang vs. CIT 193 ITR 321 (SC). So, we do not uphold the order of the ld. CIT(A) and we direct the CIT(A) to treat the a .....

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for non-deduction of TDS against payment of interest on loan. 13 The brief facts qua the issue are that this ground of revenue relates to disallowance of interest paid to Upkar Distributors P. Ltd. of ₹ 87,508/- and Sarada Trade Fin P. Ltd. of ₹ 1,22,183/- u/s.40(a)(ia) of the I.T. Act. The assessee had debited in his income/Expenditure A/c ₹ 87,508/- and ₹ 1,22,183/- under the head interest on loan to Upkar Distribution Pvt. Ltd. and Sarada Trade Fin Pvt. Ltd, however n .....

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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 .....

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ve 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). 16 In the result, the appeal filed by the Revenue on this issue is dismissed. 17. Ground No.4 raised by the Revenue relates to addition of ₹ 2,71,000/- made on account of low drawing by the assessee. 18. The brief facts qua the issue are that assessing officer made the addition on account of low drawings. The assessee sub .....

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