TMI Blog2021 (5) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer treated the same as business income . The Tribunal decided the issue in each of the aforesaid assessment years by following the order of Tribunal in assessee s own case in ITA No.2285/Mum/2010 for assessment year 2006-07 [ 2014 (1) TMI 1599 - ITAT MUMBAI] The Tribunal accepted assessee s plea that the income from sale of shares has rightly been disclosed under the head short term capital gains and rejected Revenue s view of holding the income as business income. Disallowance u/s 14A r.w.r. 8D(2) - short contention of the assessee is that the disallowance may be restricted to exempt income earned - HELD THAT:- This issue is no more res-integra that disallowance under section 14A of the Act cannot exceed exempt income earned. [Re. PCIT v. State Bank of Patiala [ 2018 (4) TMI 23 - PUNJAB HARYANA HIGH COURT] The Hon ble Supreme Court of India [ 2018 (11) TMI 1565 - SC ORDER] dismissed the SLP of revenue against the judgement of Hon ble High Court]. The Assessing Officer is directed to restrict the disallowance under section 14A of the Act to the extent exempt income earned by the assessee during the period relevant to the assessment year under appeal. The ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010. The Tribunal vide order dated 21/08/2013 decided the issue in favour of the assessee and directed the Assessing Officer to treat the gain on account of sale of shares as short term capital gain. Thereafter, in assessment year 2008-09, 2012-13 and 2014-15 again the Assessing Officer changed the head income from short term capital gains to business income in respect of income earned by the assessee on sale of shares held as investment. The Tribunal in an appeal by the assessee in ITA No. 7710/M/2011 for AY 2008-09 decided on 30-10-2015, ITA No.6798/Mum/2018 for AY 2012-13 6800/Mum2018 for AY 2014-15 decided vide common order dated 22/01/2020 held that the income from sale of shares is to be treated as short term capital gains. The facts in the impugned assessment year are identical. Thus, the issue raised by the assessee in ground No.1 of the appeal is squarely covered by the decisions of Tribunal in assessee s own case. 4. The ld. Counsel for the assessee submitted that in ground No.2 of appeal the assessee has assailed disallowance made under section 14A of the Income Tax Act, 1961 (in short the Act ) r.w.r 8D(2) of the Income Tax Rules, 1962 (in short the Rules ). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular No.4 of 2007 dated 16/06/2007 to contend that the assessee can have two portfolios one comprising of securities, which are to be treated as capital assets and the trading portfolio comprising of stock in trade. 7. Both sides heard, orders of the authorities below examined and the decisions on which reliance has been placed by the ld. Counsel for the assessee considered. 8. In ground No.1 of appeal the assessee has assailed the findings of CIT(A) in treating income of ₹ 15,50,041/- under the head Income from Business or Profession as against Income from Short Term Capital Gains disclosed by the assessee. Undisputedly, there is no bar in assessee holding two portfolios i.e. (1) investment portfolio; and (2) business portfolio. The income generated from transactions held under investment portfolio results in capital gains, short term/long term as the case may be depending upon holding period. Whereas, the income from sale and purchase of shares held under business portfolio is exigible to tax under the head Income from Business or Profession . In the present case, the assessee has disclosed income from sale of shares as short term capital gains. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year under appeal. The ground No.2 is partly allowed in the terms aforesaid. 10. In ground No.3 of appeal, the assessee has assailed charging of interest under section 234A, 234B and 234C and 234D of the Act. Charging of interest under aforesaid sections is mandatory and consequential, hence, the ground No.3 raised by the assessee is without any merit, hence, dismissed. 11. In ground No.4 of appeal, the assessee has assailed initiation of penalty proceeding under section 271(1)(c) of the Act. Challenge to penalty proceedings at this stage is premature, ergo, the ground No.4 is dismissed as such. 12. In the result, appeal by the assessee is partly allowed. ITA No.156/Mum/2019 (A.Y.2015-16): 13. The ld. Counsel for the assessee submitted at the outset that the grounds raised by the assessee are identical to the grounds raised in assessment year 2011-12. The submissions made while addressing the grounds in assessment year 2011-12 would equally apply to the grounds raised in assessment year 2015-16. The ld. Counsel pointed that the issue of disallowance u/s 14A can be remitted back to the Assessing Officer for verification of exempt income earned and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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