TMI Blog2013 (4) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as, the Revenue has not been able to bring out any controverting material which the ld. Counsel for the assessee has submitted that the case laws cited fairly cover the facts which the ld. CIT(A) accepted and allowed the assessee s appeal who confirmed the returned income on sale of shares as for capital gains. The appeal of the revenue stands dismissed. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Revenue has not been able to controvert this fact in so far as the ld. CIT(A) in his order computed the exempted income for taxation u/s 14A of the Act by disallowing the expenditure thereto as per Rule 8D was on the basis of not claiming the expenditure but on the earning of income was misconstrued by him when he chose to consider half percentage of interest paid by the assessee to be considered for participating in the earning of exempted income. In this view of the matter enhancement by the ld. CIT(A) is restricted to ₹ 34,944/- in accordance with the said section. This ground raised by the assessee stands partly allowed. Expenditure disallowed as the earning of sale of investment - whether such expenditure has been incurred for the business of the assessee? - HE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness expenses on account of salary including contributions to P.F.Rates and Taxes, Repairs, filing fee, Audit fee, depreciation and interest and Misc. expenses etc as claimed in the Profit and Loss account. 5. For that on the facts and circumstances of the case the orders of the CIT(A) be modified and the assessee be given the relief prayed for. 6. For that the assessee craves leave to add, alter or amend any ground before or at the time of hearing. ITA No.780/Kol/2009 (by the Revenue ): 1. That the ld. CIT(A) erred in accepting the assessee s submission that in earlier assessment years too the profit and gains from shares had been assessed under the head capital gains and should be held for this year too when it is a well settled principle that the principle of res judicata is not applicable to Income Tax Proceedings. 2. That the ld. CIT(A) erred in accepting the assessee s submission that the relied upon cases of Hon ble Supreme Court in G.Venkatswamy Naidu Co. vs CIT [35 ITR 594] and Sardar Indra Singh and Sons vs CIT [24 ITR 415] were not applicable to the assessee when the AO in his order had clearly established that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come tax Proceedings. 5. That the learned CIT(A) erred in accepting the assessee s submission that the relied upon cases of Hon ble Supreme Court in G.Venkatswamy Naidu Co. vs CIT [35-ITR594] and Sardar Indra Singh Soins vs CIT [24-ITR-415] were not applicable to the assessee when the AO in his order had clearly established that the ratio of these two cases were squarely applicable to the assessee. 6. That the learned CIT(A) erred in accepting the assessee s submission that the ratio of Hon ble Supreme Court s decision in the case of Raja Bahadur Kamahya Narayan Singh vs CIT [77 ITR 253] is applicable to the assessee whereas the ratio of the cited case was that facts must be properly assessed to discover whether it was in the nature of a trade and intention has also to be considered to reach a proper conclusion and in the assessee s case the AO had properly assessed the facts to arrive at the conclusion that the profits and gains from shares should be assessed under the head business. 7. That the learned CIT(A) erred in holding that the intention of the assessee was investment and not trading whereas the AO had clearly brought out in his reasoned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itten submissions, which written submission have also been included in the paper book by the ld. Counsel for the assessee. The ld. CIT(A) held that the income rendered to tax by assessee as Long Tern Capital Gain is acceptable to him, in so far as, the intention of the assessee to hold the same as investment was made known to it on the basis of the assessee bringing on record the assessment orders for the earlier years i.e. 2003-04 and 2004-05 as well financial statements on record. However, the ld.CIT(A) enhanced the disallowance u/s 14A of the Act for the purpose of earning dividend income at ₹ 3,06,022/- when the AO had categorically given a finding that they are disallowances only on account of proportionate expenses u/s 14A of the Act when the combined effect of expenses to be disallowed in the profit and loss account on account of salary, P.F.rates and taxes, repairs etc. which are part and parcel of the earning of business profit and loss account and were consistently claimed by the asessee and not disallowed by the AO but on the surmises that the AO is holding this expenditure allowable for earning the expenditure as for business which he was not to accept on the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. in ITA No.659/Kol/2008, it was held that even the shares purchased in the same year and sold cannot be considered for taxation as business in so far as the assessee had complied with various govt. regulations to hold the shares as per the guidelines of the SEBI cannot be thrust upon the assessee on the sole opinion of the AO to be rendered as business income. Similarly reliance has been placed on ITAT, Kolkata in the case of Coloma Commercial Co. Ltd vs ACIT in ITA No.585/Kol/2009 and also in the case of JCIT vs Shri Deo Kumar Saraf in ITA No.411/Kol2009. The crux of the finding that the assets which have been held as investments have been sold on account of capital and not for business. We are inclined to hold the issue as covered in favour of the assessee, in so far as, the Revenue has not been able to bring out any controverting material which the ld. Counsel for the assessee has submitted that the case laws cited fairly cover the facts which the ld. CIT(A) accepted and allowed the assessee s appeal who confirmed the returned income on sale of shares as for capital gains. The appeal of the revenue stands dismissed. 5. Now coming to the assessee s appeal it has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of the assessee. The ld. Counsel for the assessee has submitted that it is a settled principle in so far as computing the capital gains is not to be considered in a confused manner no expenditure is claimed to reduce the capital gains for reducing the consideration. We do find the contention of the ld. Counsel for the assessee justifiable in so far as the Revenue has not controverted that the expenditure of the claim for the business of the assessee are only for the business of the assessee and has not been claimed as increase in the cost of shares sold as investment. In this view of the matter this ground of the assessee is allowed and the AO is directed to delete the addition of ₹ 1,00,000/-. 8. In the result the appeal of the assessee is partly allowed. 9. As pointed out earlier in the appeal filed by the Revenue for A.Yr. 2006-07 we have perused the ground raised and on our finding to the issue where the AO had assessed in his opinion of holding of rendering income as capital gains to be considered as business income is already dealt with by the ld. CIT(A) and which have been upheld by us requires no further deliberation. In view of the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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