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TMI Blog2016 (12) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... its order dated 26/04/2016. Therefore, respectfully following the decision of the Hon’ble high court we also hold in the case of the assessee that even though the shares are held for less than 30 days same are chargeable to tax as capital gain and not as income from business profession in case of the assessee. Disallowance u/s 14 A - Held that:- Ld. assessing officer without recording the satisfaction that the claim of the assessee is incorrect has straightaway applied the provisions of rule 8D of the income tax rules, 1962. The above action of the Ld. assessing officer cannot be upheld in view of the decision of the Hon’ble Delhi High Court in case of CIT versus Taikisah engineering private limited [2014 (12) TMI 482 - DELHI HIGH COURT] that without recording the satisfaction against the claim of the assessee that it has incurred nil expenditure for earning of the exempt income the provisions of rule 8D cannot be invoked. In any case, the Ld. assessing officer has not pointed out any expenditure, which has been incurred by the assessee according to him for the earning of the exempt income of dividend of ₹ 8.60 Lacs. Further, the restriction of the disallowance to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14A of the Act is excessive and unreasonable; 4. That the conclusions and inferences of the Assessing Officer and/or Commissioner (Appeals) are based on suspicions, conjectures, surmises and extraneous and irrelevant considerations; 5. That the reliefs prayed for may kindly be allowed and the order(s) of the Assessing Officer and/ or Commissioner (Appeals) may kindly be quashed, set aside, annulled or modified; 6. That the aforesaid Grounds of Appeal are without prejudice to each other; 7. That the Appellant craves leave to vary, alter, amend or add to the aforesaid Grounds of Appeal before or at the time of hearing of the above appeal. 3. The brief facts of the appeal is that appellant is a private limited company carrying on the business of trading in plant and machinery, machinery tools, auto mobile components etc. The appellant filed its return of income on 31st of March 2008 declaring nil income. The assessment was made by the Ld. AO vide assessment order dated 30/11/2009 determining the total income of the assessee of ₹ 6382746/ . During the year the assessee has earned profit of ₹ 6382746/ on sale of shares which were shown by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort-term capital gain as offered by the assessee. It is further contended that assessee is carrying on the investment in shares without any intention to earn business income out of those shares. The Ld. assessing officer was of the view that though the assessee has mentioned that these purchases and sale of shares in its books of accounts have been shown as investment but the nature of the transaction of the shares shows that the assessee was doing frequent transactions for sale and purchase of the shares. He further said that the assessee is not carrying on any other activity other than the purchase and sale of the shares. It was further the finding of the Ld. assessing officer that the sole object of the assessee was to dealing the trading of shares and none other than that, therefore relying on the draft circular No. 4/2007 dated 15/06/2007 issued by the Central board of direct taxes, the Ld. assessing officer was of the view that assessee is carrying on the business of trading in shares as no separate books of accounts of the investment in regular businesses are maintained, there is a frequent trading in a particular script and the shares are transferred from stock in trade to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is available at page No. 16 of the order of the Commissioner of income tax appeals dated 26/07/2013 passed in pursuance to order of the Ld. assessing officer under section 153A of the income tax act for assessment year 2006 07 to 2011 12 in case of the assessee. According to that chart the assessee has dealt with in 8 scripts out of which in one of the script the assessee has earned a short term capital gain of ₹ 6731272/ and in other scripts there are minor profits or losses and further the assessee has also earned the long-term capital gain of ₹ 64905/-. On appreciation of the about transactions, The Ld. CIT appeal has held that the Scripts, which are held for less than 30 days, shall be chargeable to tax under the head business income relying on the decision of the Dreamland buildTech private limited. Subsequently, in that particular case assessee preferred appeal before the coordinate bench and vide order dated 12/12/2014 wide page No. 15 para No. 8.3 of the order of the appeal of the assessee was allowed and it was held that the entire profits from the purchases and sales of shares said to be assessed under capital gain, even though they are held for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined by the Ld. Commissioner of income tax appeal may be deleted. 11. Ld. departmental representative relied upon the orders of the lower authorities. 12. We have carefully considered the rival contentions. According to us the details of the expenditure incurred by the assessee are tabulated by the Ld. 1st appellate authority at page No. 18 of his order, which are related to the audit fees, bank charges and fees and taxes. The appellant submitted before the Ld. assessing officer that it has not incurred any expenditure for earning those income and further against the claim of the assessee Ld. assessing officer without recording the satisfaction that the claim of the assessee is incorrect has straightaway applied the provisions of rule 8D of the income tax rules, 1962. The above action of the Ld. assessing officer cannot be upheld in view of the decision of the Hon ble Delhi High Court in case of CIT versus Taikisah engineering private limited 330 ITR 338 that without recording the satisfaction against the claim of the assessee that it has incurred nil expenditure for earning of the exempt income the provisions of rule 8D cannot be invoked. In any case, the Ld. assessing offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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