2011 (10) TMI 728 - AT - Income Tax

Summary

Issues involved:
Revenue challenges deletion of deemed dividend income u/s 2(22)(e)
Assessee challenges treatment of short term capital gains as business income

Deemed dividend income u/s 2(22)(e):
The revenue challenged the deletion of deemed dividend income u/s 2(22)(e) by the Commissioner of Income Tax (Appeals). A survey u/s 133A revealed that the assessee held shares individually and as a beneficial owner through HUF. The Assessing Officer contended that the assessee, as a beneficial owner of more than 10% shares, fell u/s 2(22)(e). However, it was established that HUF shares cannot be clubbed with individual shares for this purpose. Legal precedents supported this distinction between individual and HUF shares. The Tribunal dismissed the revenue's appeal based on this interpretation.

Treatment of short term capital gains:
The assessee challenged the treatment of short term capital gains as business income. The Tribunal noted that the cross objection on this issue was not pressed by the assessee and thus dismissed it. Consequently, both the revenue's appeal and the assessee's cross objection were dismissed.