TaxTMI 
TaxTMI 
2002 (2) TMI 1351
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....essing Officer held that the Computer software is integral part of computer while computer is being claimed as capital asset. The AO further held that computer software being integral part of computer cannot be treated otherwise. Hence the same is treated as capital expenditure. 4. The assessee contested that the addition on the ground that software has a very limited life and therefore there is a constant need to update. The AR contended that since the software which needs to be updated repeatedly gets outdated also very fast as such it cannot be treated as capital asset. 5. The Ld. CIT(A) allowed the software expenses as revenue expenses. 6. Aggrieved, Revenue is in appeal before us. 7. We heard both the parties. We set aside this....
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....IT(A), the assessee stated that the AO's contention that units of mutual fund are also in the nature of shares is not correct. The assessee also submitted that the explanation to Sec 73 applies to shares of companies. Unit of mutual funds are not shares nor is a mutual fund a company. The act also clearly brings out that shares do not include units u/s 2(42A) which defines short term capital assets, According to the proviso to the said section the holding period for shares had been reduced to 12 months w.e.f. 1.4.88. A specific amendment was made w.e.f. 1.4.95 in the said proviso to provide that even for the units the holding period would be 12 months. If shares included units there would not be a separate amendment and one amendment wh....
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....ecision of Supreme Court in the case of Investment Ltd vs CIT 77 ITR 533. 12. After considering the contentions of the assessee, the Ld. CIT(A) allowed the assessee's claim by observing as under: "I have gone through the submissions of the assessee and also the order of the AO.As regards the units whether they are in the nature of shares I cannot support the view of the AO. In this regard. The explanation to sec 73 was inserted with a specific object i.e. to curb the device sometimes resorted to but business houses controlling group of companies to manipulate and reduce the taxable income of the companies under their control. From the object it is clear that for the application of the said explanation and to do the activity of purc....
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....ties are purchased by the assessee with a view to increase the business with the Govt. or of the object of retaining the goodwill of the authorities for the purpose of business the loss incurred on sale of such bonds and securities is allowable as business loss. Thus further the argument of the assessee is also well supported by Bombay High Court's decision in the case of Gannon Dunkerley & Co. Ltd. In the instant case also from the sequence of event it could be seen that the assessee made investment in Cannexpo in anticipation of assessee being appointed as a broker for this financial institution. Further it is also noticed that the assessee has never made such investments in the past. The sole object of making this investment appea....
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.... activity or loss incurred by the assessee. It is also well established that loss incurred by the assessee in the course of his business activity otherwise springs directly from his business activity, is held to be trading loss then question as to whether loss is on account of sale of investment of sale of stock in trade does not arise at all. Hence, the amount of ₹ 42,40,000/- which has been incurred on the sale of Canexpo units is treated as business loss." 13. Aggrieved the revenue is on appeal before us. 14. We heard both the parties. As held by the Ld. CIT(A), units cannot be considered as shares. The Apex Court in the case of Appollo Tyres Ltd (255 ITR 273) have held that loss on sale of UTI units is not speculation loss as ....
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....per the ratio of the Apex Court (supra), the loss arising from sale of the same is to be allowed as a business loss. It is immaterial whether the assessee classified the same as investment. The reason for this investment is to gain the goodwill of the institution therefore commercial expediency required this investment which was made with anticipation that the assessee may be appointed as a broker to that institution. The loss on sale of the Canexpo units is a business loss because the investment has been made for the betterment of the business and does not depend on its classification in the books of accounts. 16. The fifth ground of appeal raised by the Revenue reads as follows: "On the facts and in the circumstances of the case and ....