2011 (5) TMI 1056 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT (A) for assessment year 2005-06 on grounds of arbitrariness, exceeding jurisdiction, violation of instructions, disallowance u/s 14A, understatement of income, dismissal of appeal, and additional grounds.

Grounds 1-3: Dismissed as not pressed during hearing.

Grounds 4 & 5 (Disallowance u/s 14A): Assessee pointed out arithmetical mistake by Assessing Officer in treating long term capital gain, issue restored for recomputation following Godrej Boycee Manufacturing Co. Ltd. vs. DCIT [2010] 328 ITR 81 (Bombay).

Ground 6 (Understatement of income): Assessee argued conversion of stock-in-trade to investment not prohibited by Income Tax Act, CIT (A) upheld addition based on CBDT instructions and Supreme Court principles, but error in calculation acknowledged, issue restored for recomputation.

Grounds 7 & 8: General in nature, no adjudication required.

Conclusion: Appeal partly allowed for statistical purposes, issue of understatement of income restored for recomputation by Assessing Officer based on correct calculation.