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TMI Blog2015 (11) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... interested in share market only as an investor and not otherwise. No hesitation to treat the assessee as an investor and direct the Learned AO to treat the gains arising out of share transactions as returned by the assessee as capital gains. - Decided in favour of assessee. Addition towards loan received from Sri Ram Niranjan Saraogi u/s 68 - Held that:- The assessee had duly discharged his onus in full in terms of section 68 of the Act by furnishing all the details and creditworthiness of the loan creditors. Nothing prevented the Learned AO from making verification of these transactions and details filed by the loan creditor with the concerned assessing officer of the loan creditor. We also find that the concerned loan creditor Sri Ram Niranjan Saraogi had got sufficient cash balance as per his books which he had deposited in his bank account and this conduct cannot be doubted with in the facts and circumstances of the case. These facts are quite evident from the cash flow statement of Sri Ram Niranjan Saraogi and Sri Naresh Kumar Bharech filed by the Learned AR before us. Hence we have no hesitation in directing the Learned AO to delete the addition made u/s 68 of the Act.- De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares. d) The holding of share of 12,830 out of 1,46,665 is 8.7% and frequency of the purchases and selling cancels the probability of investment. e) Total turnover wsa ₹ 8,19,15,1393 for Futures Options, ₹ 66,22,584 for shares transaction as per Form 10DB. Based on the aforesaid grounds, the Learned AO reworked the net profit from share business at ₹ 1,01,095/- and brought the same to tax. This action of the Learned AO was upheld by the Learned CITA in first appeal. Aggrieved, the assessee is in appeal before us on the following ground:- 1. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the action of the A.O. in treating the surplus of ₹ 1,01,095/- from share transactions as business income instead of income under the head Capital gains. 4.2. The Learned AR furnished a paper book containing pages 1 to 57 wherein at pages 13-15, the details of share investments as on 31.3.2006 scrip wise were filed together with the date of purchase ; workings of long term capital gains scrip wise together with date of purchase and date of sale (average period of holding of shares mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his activities into two parts one towards investment in shares out of own funds of the assessee and other towards trading in shares out of own and borrowed funds of the assessee. It is also seen that the assessee has been doing this activity consistently. It is also seen from the balance sheet filed by the assessee that the assessee had clearly classified the share transactions under the head Investments. This itself clearly proves the intention of the assessee that he is only interested in share market only as an investor and not otherwise. We find that this issue has been elaborately dealt with by the Hon ble Bombay High Court in the case of CIT vs Gopal Purohit reported in 228 CTR 582 (Bom) , wherein the questions raised before the Bombay High Court and decision rendered thereon are as below:- (a) Whether, on the facts and circumstances of the case and in law, the Hon ble ITAT was justified in treating the income from sale of 7,59,003 shares for ₹ 5,00,12,879/- as an income from short term capital gain and sale of 3,88,797 shares for ₹ 6,65,02,340/- as long term capital gain as against the Income from business assessed by the A.O. ? (b) Whether, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt view should be taken for the year under consideration, since the principle of res judicata is not applicable to assessment proceedings. The Tribunal correctly accepted the position, that the principle of res judicata is not attracted since each assessment year is separate in itself. The Tribunal held that there ought to be uniformity in treatment and consistency when the facts and circumstances are identical, particularly in the case of the assessee. This approach of the Tribunal cannot be faulted. The revenue did not furnish any justification for adopting a divergent approach for the Assessment Year in question. Question (b), therefore, does not also raise any substantial question. In so far as Question (c) is concerned, again there cannot be any dispute about the basic proposition that entries in the books of account alone are not conclusive in determining the nature of income. The Tribunal has applied the correct principle in arriving at the decision in the facts of the present case. The finding of fact does not call for interference in an appeal under Section 260A. No substantial question of law is raised. The appeal is accordingly dismissed. It is pertinent to no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor was having sufficient cash balance of ₹ 81,111/- and out of which a sum of ₹ 75,000/-was deposited by the concerned loan creditor in his bank account and sufficient bank funds and out of which a cheque for ₹ 1,00,000/- was issued by the loan creditor to the assessee as loan. She argued that these facts are quite evident from the bank statement given by the loan creditor and which is also part of the paper book filed herein. She further argued that the assessee s brother had duly appeared in person before the Learned AO and confirmed the aforesaid transactions. In view of these, she pleaded that the assessee had duly discharged his onus in terms of section 68 of the Act in full and accordingly no addition u/s 68 would lie in the facts and circumstances of the case. In response to this, the Learned DR vehemently supported the orders of the lower authorities. 5.3. We have heard the rival submissions and perused the materials available on record including the paper book and we find that the assessee had duly discharged his onus in full in terms of section 68 of the Act by furnishing all the details and creditworthiness of the loan creditors. Nothing prevented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished the complete details of the loan creditor before the Learned AO including the PAN, income tax assessment particulars of loan creditor, balance sheet and statement of total income together with confirmation of having given the loan to the assessee together with the respective sources. The Learned AO disbelived the version of the assessee and brought the loan credit to tax u/s 68 of the Act as unexplained cash credit which was also upheld by the Learned CITA. Aggrieved, the assessee is in appeal before us on the following ground:- 3.(a) For that on the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming the addition of ₹ 2,55,000/- made by the A.O. on account of loan received from Sri Naresh Kumar Bharech. 7.2. The Learned AR argued that the loan creditor had advanced monies to the assessee only by cheque out of sufficient bank balances available with him on the date of lending. This is quite evident from the bank statements enclosed in the paper book filed. She further argued that the assessee had duly appeared in person before the Learned AO and confirmed the aforesaid transactions. However, at the time of deposition before the Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Act. Accordingly, the ground no. 3 (a) raised by the assessee is allowed. 8. The next ground to be decided in this appeal is as to whether the Learned CITA is justified in confirming the disallowance of interest to loan creditor Sri Naresh Kumar Bharech in the sum of ₹ 65,230/- as the loan received from him has been added u/s 68 of the Act. 8.1. This issue is only consequential to the previous ground. While disposing of Ground No. 3(a) raised by the assessee, we have held that the loan received from Sri Naresh Kumar Bharech in the sum of ₹ 2,55,000/- should not be added u/s 68 of the Act. The Ground No. 3(b) raised by the assessee is only payment of interest on the said loan of ₹ 2,55,000/-. The Learned AO and Learned CITA observed that the assessee had not actually paid the said interest of ₹ 65,230/- but only credited to the parties account. However, we find from the face of the assessment order itself that the assessee is following mercantile system of accounting and accordingly the assessee is duly entitled for deduction of ₹ 65,230/- towards interest payable on the loan from Sri Naresh Kumar Bharech. Accordingly, the ground no. 3(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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