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TMI Blog2012 (12) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding the depreciation of Rs. 2,01,565/- in respect of motor car. The A.O. also noted that the assessee could not produce the log book maintained in respect of the motor car. He, therefore, disallowed 20% of such expenses on estimate amounting to Rs. 1,45,283/- towards personal usages. In appeal, the CIT(A) reduced the disallowances to 5% of such expenses aggrieved by which the assessee is in appeal before the Tribunal. 2.1 Before us, the ld. AR for the assessee reiterated the submissions made before the lower authorities that the motor car had been used for the purpose of business to approach various customers and for follow up of meetings and, therefore, no disallowance should be made. The ld. DR on the other hand, supported the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mobile is quite common and cannot be ruled out and in the absence of full details of call records etc., it is not established that these have been used only for the purpose of business. Therefore, the estimated disallowance is justified. The disallowance made by the CIT(A) @ 5% which comes to Rs. 2,200/- per month is reasonable. Therefore, the order of the CIT(A) is upheld. 4. The third dispute is regarding the estimate disallowance out of business promotion expenses, conveyance expenses, miscellaneous expenses and office expenses. The A.O. noted that the assessee had claimed total expenditure of Rs. 9,21,860/- under these fourheads. The A.O. observed that there were no proper vouchers which were only self made or generated by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses is justified. In our view, on the facts of the case the estimate disallowance of Rs. 50,000/- out of these expenses will meet the ends of justice. We, therefore, set aside the order of the CIT(A) and uphold the disallowance to the extent of Rs. 50,000/-. 5. The fourth dispute is regarding the nature of income from sale and purchase of shares. The A.O. noted that the assessee had shown Short Term Capital Gain on the sale of equity shares at Rs. 10,50,596/-. The A.O. also noted that the number of transactions was very large with high frequency involving 3000 transactions. The A.O. further noted that the assessee while giving the details had himself mentioned "Speculative Short Term Capital Gain" which clearly indicated the business nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was placed on the decision of Tribunal in the case of Gopal Purohit v. Jt. CIT [2009] 29 SOT 171 (Mum.) which has been upheld by the Hon'ble High Court of Bombay CIT v. Gopal Purohit [2011] 336 ITR 287. The ld. DR, on the other hand, argued that considering the high frequency and large number of transactions, the said transactions have been rightly treated as trading activity. It was also pointed out that in most of the cases shares have been sold on the same day which showed that sales have been made even without taking delivery and, therefore, it was clear case of the speculation activity. It was accordingly urged that the order of the CIT(A) should be upheld. 5.2 We have perused the records and considered the rival contentions careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations when the investor may also sell the shares after short holding in order to reshuffle portfolio when prices are falling or to encash investment in case of exceptional gain or for some personal exigencies. Each case is required to be examined carefully to ascertain the true nature of transactions. 6. In this case, the details of share transactions giving the date of purchases and sale have been placed on record. It is clear from the details given that in most of the cases shares have been sold on the very date of purchase which shows that sales have been made even without taking delivery. Thus most of the transactions are speculative in nature. In fact the assessee while giving the details of the transactions has himself mentioned "Sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased during the year or in the immediately preceding year. Therefore, only in respect of such cases, the decision in case of Gopal Purohit (supra), could be applied. The Hon'ble High Court of Bombay had upheld the decision of the Tribunal in the case of Gopal Purohit (supra), on the ground that there was no substantial question of law involved. Even before Hon'ble High Court there was no question raised that all delivery based transactions have always to be treated as investment activity. Thus the decision of the Tribunal as well as the Hon'ble High court in case of Gopal Purohit (supra), cannot be considered as a precedent for the proposition that all delivery based shares have to be treated as investment activity. The assessee can also b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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