2012 (6) TMI 473 - ITAT KOLKATA

Treatment on purchase and sale of shares as "Business Income" as against "Capital Gain" – Held that:- assessee's transaction of shares is in the nature of investment in shares and accordingly delivery based transaction in the present case is treated as those in the nature of investment and profit received is to be treated either as short-term capital gain or long-term capital gain depending upon the period of holding. CIT(A) has rightly held the transactions of the assessee as investment in shares chargeable to capital gain by taking uniformity in treatment and observing the principle of consistency, when the facts and circumstances are identical in assessee's own case in earlier years. appeals of revenue is dismissed

Whether CIT(A) was wholly wrong and unjustified in confirming the arbitrary, ad hoc and estimated disallowance of expense of Rs. 2,80,686/- u/s 14A of the I.T Act @ 5% of the exempt dividend income made in the assessment merely on presumption without considering the fact that no expenditure was incurred for earning the said income and without bringing on record any material or evidence to establish the nexus between such alleged expenditure and the earning of said income – Held that:- in the case of Godrej Boyce Mfg. Co. Ltd. (2010 - TMI - 78448 - BOMBAY HIGH COURT - Income Tax), that Rule 8D is applicable for and from assessment year 2008-09 and prior to that the Assessing Officer can make estimate in the given facts and circumstances. disallowance restricted to 1% in relation to earning of exempted dividend income and direct the Assessing Officer to calculate the expenditure on that basis. This ground of assessee's cross objections is partly allowed. appeals of the revenue are dismissed and the Cross Objections of the assessee are partly allowed