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TMI Blog2017 (1) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... . - ITA No. 5178/Del/2012, ITA No. 5029/Del/2012 - - - Dated:- 23-1-2017 - SMT. DIVA SINGH, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Department : Smt. Amit Kumar Sharma, Sr.DR For The Assessee : None ORDER PER O.P. KANT, A.M.: These cross appeals of the Revenue and the assessee are directed against order dated 23/07/2012 of learned Commissioner of Income-tax (Appeals)-XIII, Laxmi Nagar, New Delhi for assessment year 2008-09. 2. The grounds of appeal raised by the Revenue in ITA No.5178/Del/2012 are as under: 1. Whether the CIT(A) under the facts and circumstances of the case and in law was justified in holding that profit of ₹ 35,14,66,127/- earned by the assessee on sale of sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was issued and complied with. The Assessing Officer was not satisfied with the contention of the assessee that activity of purchase and sale of shares was investment activity and profit earned thereon was taxable under the head short-term capital gain. The Assessing Officer observed that various scrips of share were purchased and sold after holding for a small period. He further observed that: (i) No separate books of accounts were maintained for alleged investments and business activity (ii) turnover in the share was to the tune of ₹ 69, 06, 09, 30, 892/- (iii) the assessee was frequently trading in a particular scrip and the intention was to earn profit and not dividend, otherwise the assessee would have held the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. 6. In support of the sole ground raised in the appeal filed by the Revenue, the learned Senior Departmental Representative relied on the order of the Assessing Officer and submitted that in view of facts and circumstances of frequency and volume of transactions in purchase and sale of shares coupled with the facts of money borrowed for purchase of shares, no separate books of accounts for business and investments etc., the Assessing Officer has rightly held the activity of purchase and sale of shares as the business activity. In respect of the ground No. 1 raised by the assessee in its appeal, the learned Sr. Departmental Representative relied on the order of the learned Commissioner of Income-tax (Appeals) and submitted that disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,300 5,300 3 Omaxe Limited 24,426 24,426 4 DLF Limited 6,567,294 6,567,294 5 Edelweiss Capital Ltd 5,202 5,202 6 BGR Energy Systems 5,838 5,838 7 Reliance Power Limited 142,896 142,896 8 Reliance Energy Limited 408,982 408,982 9 Grabal Alok Impex Limited 1,900,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no separate books of accounts were maintained for the alleged investment and the business activity and the assessee has borrowed money for purchase of shares. 11. In the light of the ratios of judicial pronouncement on the issue in dispute, we are of the opinion that conduct of the assessee reflect the intention of business activity and, thus, we, accordingly, hold the shortterm capital gain declared by the assessee amounting to ₹ 35,14,66,127/- as the profit and gains from business activity of purchase and sale of shares. Accordingly, the ground of the appeal of the Revenue is allowed. 12. In respect of the ground No. 1 of appeal of the assessee, we find that the learned Commissioner of Income-tax (Appeals) has passed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be disallowed which is worked out at ₹ 7,60,000/- of average investments of ₹ 15,20,00,000/-. As such the disallowance made on account of administrative expenses by the Assessing Officer is confirmed. 13. In view of above, we uphold the order of the learned Commissioner of Income-tax (Appeals) on the issue in dispute and ground of the appeal of the assessee is rejected. 14. The ground No. 2 of the appeal is dismissed as infructuous as the penalty was merely initiated and not levied by the Assessing Officer. The assessee cannot be said to be aggrieved at this stage as the assessee will get sufficient opportunity at the time of levy of the penalty. Accordingly, the ground No. 2 of the appeal is rejected. 15. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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