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TMI Blog2021 (11) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... e, no adjudication is required. 3. Grounds of appeal Nos. 2 to 2.6 deals with whether the income arising out of shares is business income or income from capital gains? 4. In the assessment order, the A.O. has asked the assessee whey the sale of shares should not be treated as business income. The assessee has submitted that the date of purchase of shares on 18.12.2009 and sale of shares on 23.03.2011. The above transactions declared in the balance sheet as an investment and submitted that the same may be treated as capital gains. The A.O. after considering the explanation of the assessee, he has observed that in the earlier years also the sale and purchase of the shares by the assessee has treated as business income which has been dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a business activity. The Ld. CIT(A) by following the Circular Nos. 4 & 6 deleted the addition made by the A.O., which reads as under: "3.2 I have gone through the facts of the case and have also considered the rival submissions. In view of that, the case is discussed as under. 3.3 On perusal of the assessment order, it is noticed that the appellant has sold equity shares and has made a long term capital gain to the tune of Rs. 1,23,34,606/-. The appellant has treated the same as capital gains in computing the total income and has claimed the same as exempt under section 10(38) of the Income Tax Act, 1961. The appellant has entered into a single solitary transaction for purchasing and selling the equity shares with the intention of rei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of shares of Induslnd Bank is squarely covered by the above mentioned circular and the appellant's action falls in line with the intent of the legislation. 3.5. I have considered the above submissions of the appellant. As laid down in the CBDT circular No. 4/2007, the substantial nature of transactions and the manner of maintaining books of accounts plays an important role in determining the nature of transaction. Also, as depicted by the Circular No. 06/2016, in the present case, the appellant has treated the shares as investment and not as stock-in-trade and there are no fine grounds to say that the appellant is a dealer in shares and not an investor especially when the sale of shares was a single solitary transaction. From t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which are taxable, for the purpose of computation of disallowance under Rule 8D(iii) of the IT Rules. For instance, the appellant has investments in foreign subsidiaries, and the earning from the same is liable to tax. The appellant has similar other investments, wherein the income/returns are taxable. Therefore, on proper verification, the AO is directed to re-compute the disallowance under Rule 8D(2)(iii) of IT Rules read with Section 14A of the Act after excluding investments from which no exempt income is earned. This ground is therefore partly allowed." 12. We have considered the orders passed by the Ld. CIT(A) as well as A.O. and heard both the sides, we find that the Ld. CIT(A) only directed the A.O. to verify entire investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decide where the assessee has to conduct the Board meeting. In view of the above, we are of the opinion that the Ld. CIT(A) rightly deleted the addition made by the A.O. and we find no infirmity in the order passed by the Ld. CIT(A). Thus, grounds No. 3.1 to 3.4 raised by the Revenue are dismissed. 15. Grounds No. 3.5 & 3.6 relates to disallowance of car hire charges at Rs. 22,80,000/-. During the year under consideration, the assessee has paid hire charges to M/s. Sonnet Trade and Investments Pvt. Ltd. and Mrs. Anuradha Raghu to the tune of Rs. 22,80,000/- (Rs. 18,00,000/- and Rs. 4,80,000/- respectively). The case of the A.O. is that the assessee has taken a Honda Civic car on rent which is registered in Chennai and the assessee is havi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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