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TMI Blog2018 (3) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. - ITA No. 2572/Del/2016 - - - Dated:- 22-3-2018 - Shri R. K. Panda, Accountant Member And Smt. Beena A. Pillai, Judicial Member Assessee by : Shri Piyush Kaushik, Adv. Shri B. L. Gupta, Adv. Department by : Shri S. R. Senapati, Sr.DR ORDER Per R. K. Panda, AM This appeal filed by the assessee is directed against the order dated 15.02.2016 of the CIT(A)- 16, New Delhi relating to assessment year 2011-12. 2. Facts of the case, in brief, are that the assessee is an individual and derives income from capital gain and other sources. She filed her return of income on 24.08.2011 declaring total income of ₹ 8,60,074/-. During the course of assessment proceeding, the Assessing Officer observed that the assessee has sold share of M/s J.T. Agro Goods Pvt. Ltd. on 10.06.2010 for ₹ 60,00,000/-. Against the said receipt/sale, the assessee declared net profit of ₹ 26,00,000/- after deducting purchase cost of shares of ₹ 3,00,000/- and claiming deduction u/s 35 amounting to ₹ 54,75,000/- on account of donation made of ₹ 31,00,000/- towards scientific research to M/s Himalaya Trust Dehradun. The assessee accordingly declared inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of sale of shares and treated the same as short term capital gain . The Assessing Officer also disallowed the claim of deduction u/s 35 of the I.T. Act. 4. In appeal, in absence of any new material brought to notice of the ld. CIT(A) regarding the business activity, he upheld the action of the Assessing Officer in treating the business income from sale of shares as short term capital gain . He, however, allowed the claim of alternate deduction u/s 80GGA to the assessee at ₹ 31,00,000/- as against the claim of deduction u/s 35 of the IT Act by the assessee. 5. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal :- On the facts and in the circumstances of the case and in law the CIT(A) was incorrect and unjustified in :- 1) Not allowing deduction as claimed u/s 35. 2) In restricting the deduction to ₹ 31,00,000/- only. 3) In holding that the assessee was not carrying on any business activity. 4) Holding that the assessee was not entitled to deduction u/s 35 in the absence of business income. 5) Holding that the sale of shares was not business inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es would lead to business income and not short term capital gains. He also relied on following decisions :- a. V. Amirtham Ammal vs. CIT, 74 ITR 739. b. Laxmi Co. vs. CIT, 43 ITR 415. c. Premji Bhimji vs. CIT, 81 ITR 179. d. Manoj Kumar Samdaria vs. CIT in ITA No.97/2014 dated 12/03/14. e. Equity Intelligence India (P.) Ltd. vs. ACIT, 61 taxmann.com 256. d. Dilip Battu Karanjule vs. ITO, 74 taxmann.com 12. 10. He accordingly submitted that when the transaction is not in dispute and the Assessing Officer has accepted the purchase and sale to be genuine, therefore, merely because assessee has held the shares for a short period, the same cannot be considered as short term capital gain as against business income treated by the assessee. 11. Ld. counsel for the assessee further submitted that the ld. CIT(A) was not justified in denying the benefit of deduction u/s 35 of the I. T. Act when the assessee has fulfilled the requisite conditions. 12. Ld. DR on the other hand heavily relied on the order of the ld. CIT(A). Referring to the decision of the Mumbai Bench of the Tribunal in the case of ACIT vs. Narendra I. Bhuva reported in 90 ITD 174, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares outside the assessee s line of business may constitute adventure in nature of trade . According to him, when the purchase has been made solely and exclusively with the intention to resell it at a profit and the assessee has no intention of holding the property for herself for a long period or otherwise enjoying and using it, the presence of such an intention is a relevant factor and may constitute an adventure in nature of trade. He submitted that the reason for treating the profit from sale of such shares as short term capital gain as against the business income declared by the assessee was to deny the benefit of deduction u/s 35 of the I.T. Act. 15. We find some force in the arguments advanced by the ld. counsel for the assessee. It is an undisputed fact that the Assessing Officer has not disbelieved the purchase and sale of shares on the basis of the various documents filed before him since ultimately he has treated the profit from sale of shares as short term capital gain. His grievance is that the assessee has manipulated the so-called shares and so-called transaction of shares of one private company is just to claim the deduction u/s 35 of the I.T. Act on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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