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2017 (12) TMI 656

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 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 (1991 (11) TMI 2 - SUPREME Court). So, we do not uphold the order of the ld. CIT(A) and we direct the CIT(A) to treat the assessee as an investor - TDS u/s 194A - addition u/s 40(a)(ia) for non-deduction of TDS against payment of interest on loan - Held 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 borrowi .....

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raised by the Revenue in ITA No.27/Kol/2015, reads as under: 1.For that, the Ld. CIT(A)-XXX, Kolkata has erred in law and on facts by holding that ₹ 3,80,455/- (out of total ₹ 60,94,446/-) is to be assessed as business income and the balance ₹ 57,13,991/- is to be assessed as Short Term Capital Gain. 2.For that, the Ld. CIT(A)-XXX, Kolkata has erred in law and on facts in holding 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 addition of ₹ 2,71,000/- made on account of low drawing by the assessee without considering the relevant 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/ .....

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ould 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 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 unimagined movement in the capital market. Therefore, assessee submitted that investment in shares and securities is merely an investment and not a business of the assessee. However, the Assessing Officer rejected the claim of the assessee and treated the assessee as a trader. 7. Aggrieved 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 incom .....

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ereas appeal filed by the Revenue ( Ground No.1 and 2 in ITA No.27/Kol/2015) are dismissed. 12. GroundNo.3 raised by the Revenue relates to addition of ₹ 2,09,691/- made u/s 40(a)(ia) of the Act 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 no tax was deducted on 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 .....

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