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TMI Blog2012 (12) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... head “capital gain” and not under the head “business income”. issue decides in favour of assessee - ITA No.5715/Mum/2011 - - - Dated:- 18-7-2012 - SHRI G.E.VEERABHADRAPPA AND SHRI B.R.MITTAL, JJ. Appellant by : Shri C.G.K. Nair Respondent by: Shri S.C.Tiwari ORDER Per B.R.Mittal, JM: The department has filed this appeal for assessment year 2008-09 against order dated 18.4.2011 of ld CIT(A), Mumbai on the following grounds: 1. Whether on the facts and in the circumstances of the case and in law, ld CIT(A) is right in deleting disallowance of Rs.2,20,331 u/s.14A as per rule 8D stating that the assessee has not claimed any expenditure and erred in not restricting the disallowance to the extent of attributable expenses relating to exempt income.? 2. Whether on the facts and in the circumstances of the case and in law, ld CIT(A) is right in deleting the addition of Rs.2,22,59,502 treating the action of AO is not justifiable in view of the CBDT s circular No.4 of 2007. 2. In respect of ground No.1 of appeal, the AO has stated that assessee has earned dividend income of Rs.1,88,645 and the same has been claimed as exempt u/s.10(34) in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed Rs.1,06,897. He submitted that out of balance amount of Rs.61,488, expenditure of Rs.42,208 is towards maintaining the status of the assessee company and such expenditure cannot be attributed for earning the exempt income. He submitted that assessee has not incurred any expenditure for earning dividend income; hence no disallowance is required to be made u/s.14A of the Act. 5. We have considered the submissions of ld representatives of parties and orders of authorities below. 6. We find substance in the submission of ld A.R. that the total expenditure debited by the assessee in its profit and loss account for the year ended 31.3.2008 is only Rs.1,68,385 and out which, assessee itself disallowed a sum of Rs.1,06,897 while computing its income leaving a balance sum of Rs.61,488. The break-up of the said amount of Rs.61,488 has been mentioned hereinabove in para 2. On perusal thereof, we observe that no such expenditure is debited by the assessee in its profit and loss account, which can be said to have been incurred for earning dividend income. Considering the facts of the case, we agree with ld CIT(A) that no further disallowance is called for. Hence, we uphold the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Godavari Corporation Ltd., 156 ITR 835 (MP) The AO considered the claim of assessee of short term capital gains of Rs.2,22,69,502 as business income of the assessee company. Being aggrieved, assessee filed appeal before ld CIT(A). 8. Ld CIT(A) after considering the decisions cited by the AO and the submissions of assessee has held vide para 5.1 of the impugned order that AO is not justified in treating the capital gain shown by the assessee as business income. The said para reads as under: I have duly considered the submissions of the appellant s AR. I find that during the entire year, the assessee has entered into 3 transactions of purchases of its scrips. From the facts of this case, it is evident that the assessee s intention was to hold them for a long period. The assessee has disclosed these transactions and the same has been accepted by the AO. But the AO has termed these transactions as business transactions which is not correct. Reliance is placed on the decision of ITAT Mumbai in the case of Janak S. Rangwala, as reported in 11 SOT 627, wherein, it has been held that the frequency of transaction is not material. The transaction as viewed from the intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the facts of the case and the principle laid down by various judgements of Hon ble Supreme Court and Hon ble Courts, the claim of the assessee as short term capital gain is justified and the order of ld CIT(A) be confirmed. 12. We have considered the orders of authorities below and submissions of ld representatives of parties. We have carefully considered the statement of shares on which assessee has claimed short term capital gain in the assessment year under consideration. 13. There is no dispute to the fact that the Hon ble Supreme Court in the case of CIT vs. Holck Larsen, 160 ITR 67((SC) held that whether a transaction of sale and purchase of shares were trading transactions or they were in the nature of investment is a mixed question of law and facts. Therefore, all the relevant factors have to be taken into account to decide whether the assessee is an investor or dealer in shares. In the case before us, it is not the case where the assessee is holding large number of shares or entered into number of transactions or the assessee is carrying on sale and purchase of shares in an organised way to character it as a trading activity. There is no dispute to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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