TMI Blog2012 (5) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... r the name and style of M/s Hadfield Industries another business of trading in chemicals under the name and style of M/s First Chemicals. During the year under consideration the assessee has shown income from other sources and short term capital gain also. 3. During the course of scrutiny assessment, the Assessing Officer disallowed detention charges of ₹ 2,82,702/- by observing that it was penal in nature. 4. After considering the detailed submissions and recording following findings, the Commissioner of Income Tax (Appeals) deleted the addition :- 4.1 The first ground of appeal is with respect to the amount paid as detention charges at ₹ 282,702/-. The A.O. has held that such detention charges are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no infringement of any law, therefore, the disallowance made by the Assessing Officer u/s 37(1) was not justified. The detailed finding recorded by Commissioner of Income Tax (Appeals) to the effect that the expenditure incurred by the assessee for delay in returning the containers is a normal and regular procedure of custom and as such the payment is nothing but in the nature of demurrage and simply because it is paid to the custom department, the nature cannot be changed. We do not find any infirmity in the order of the Commissioner of Income Tax (Appeals) in deleting the disallowance of expenditure of ₹ 2,82,702/- incurred on account of detention charges. 5. The next ground relates to deletion of disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t mean that the payment is not genuine. As far as the question of non-delivery of the letter is concerned, the counsel for the appellant has submitted that at present there are no business transactions with these persons and therefore their current addresses are not known to him and having furnished their PAN, the A.O. could have found out their whereabouts. 4.2.2 It is seen from the record that the turnover of the appellant in the proprietary business of M/s Hadfield Industries is ₹ 27,01,569/- and the turnover of the other proporietary business of M/s First Chemicals is ₹ 11,28,97,629/-. The total commission paid by him is the two respective businesses are ₹ 10,47,349/- and ₹ 7,55,700/-. As against this th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance of commission of ₹ 1,20,644/-. 7. The last grievance of the revenue relates to Commissioner of Income Tax (Appeals)'s action in treating the profit of sale of shares as capital gain instead of business income as held by the Assessing Officer. The issue as to whether profit arising out of purchase and sale of shares is assessable to tax under the head capital gains or business income is a vexed question depending upon facts and circumstances of each case, based upon the principles set out by various judicial precedents. 8. We have considered the rival submissions of the parties, gone through the orders of the authorities below and find from record that the assessee was investing in shares. At the beginn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Appeals) accepted the assessee's version of holding shares as investment and directed the Assessing Officer to treat the gain arising on delivery based shares held for less than 12 months as short term capital gains, in terms of para 4.5 of his appellate order. In this regard, the Ld.Counsel for the assessee placed on record the order of I.T.A.T., Indore Bench in the case of Shri Omprakash Suri reported in 16 ITJ 185 wherein profit on delivery based shares was treated as short term capital gain since the shares were held for less than 12 months. This order of the Tribunal was confirmed by the Hon'ble jurisdictional High Court and reported as 19 ITJ 326 wherein it was observed that where the assessee had showed income from delive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of it was offered by assessee himself as business income. Total number of script in which the assessee had invested were less than ten. There is no dispute to the settled proposition that even the investment in shares is made with a profit motive and whenever the assessee finds suitable price of shares invested by him, he sells the same and realize increased price thereon. The Commissioner of Income Tax (Appeals) after discussing the issue in para 4.5 has recorded its finding in para 4.5.3 and held that the finding recorded by the Assessing Officer that the income from sale of shares is the business income, cannot be sustained. Keeping in view totality of facts and circumstances of the case and respectfully following the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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