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TMI Blog2018 (6) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT] whereby it was held that profit from sale of shares is assessable as capital gain more so, when such profits were assessed as capital gain in earlier years - Thus AO is directed to treat the income as capital gain declared by the assessee as against business income. Disallowance on account of traveling expenses - assessee before the AO has taken the stand that it has paid fringe benefit tax at the rate of 20% - Held that:- Now it is a settled position of law that no disallowance can be made once expenses are exigible to FBT. See BG Shirke Construction Technology Pvt. Ltd. Vs. CIT [2012 (10) TMI 435 - ITAT PUNE] - ITA No. 1565/Del/2011 - - - Dated:- 4-6-2018 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For The Assessee : Sh. Ved Jain, Adv. And Sh. Ashish Chadha, CA For The Revenue : Sh. K. Tiwari, Sr. DR. ORDER PER H.S. SIDHU, JM The Assessee has filed this Appeal against the Order dated 16.01.2011 of the Ld. CIT(A)-XI, New Delhi relating to assessment year 2007-08 on the following grounds:- 1. On the facts and circumstances of the case, the order of the learned Commissioner of Income Tax (Appeals)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Ld. CIT(A), assessee is in appeal before the Tribunal. 3. Apropos Ground No. 1 5 are concerned, the same are general in nature and therefore, need not be adjudicated. 4. Apropos Ground No. 2 which is relating to confirming the short term capital gain of ₹ 2,79,79,723/- and long term capital loss of ₹ 68,016/- as business income. During the hearing, it was contended by the Ld. Counsel of the assessee that the AO has gone wrong in taxing the capital gain / loss as business income / loss. In this regard, the Ld. Counsel of the assessee invited our attention that Assessee Company all along has been treating the investment in share as investment and income earned on such investment has been declared and accepted as capital gain. In this behalf, the Ld. Counsel of the assessee further invited our attention to the facts of the A.Y. 2005-06 and 2006-07 whereby the assessee company has declared income as capital gain and the same was accepted in the assessment order passed u/s. 143(3) of the Act. It was further contended that the facts of the present year are not different than the earlier years. On the issue of long term capital loss, the Ld. Counsel of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltiple sale transactions. The Ld. Counsel of the assessee further invited our attention towards Paper Book and pointed that out transactions during the year of purchase are only 36 and the sales of 49. Out of these transactions, there is a gain in 3 transactions of purchases with the corresponding 4 transactions of sale. It was further submitted that it is a settled position of law that an assessee can have two portfolio, one of investment and another of trading. The assessee has not done any day trading. All transactions were delivery based and have been duly credited to the Demat account of the assessee. Theassessee has also received dividend on these investments as is evident from the computation of income whereby a dividend income ₹ 15,48,340/- has been received during the year. On this basis, it was submitted that the AO and the Ld. CIT(A) has gone wrong in ignoring these facts. The Ld. Counsel of the assessee also placed reliance on the Circular No. 6/2016 dated 29.02.2016 whereby it has been clarified by the CBDT that in respect of listed shares, where period of holding is more than 12 months and the assessee treats the same as capital gain, the same shall not be put t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the contention of the Ld. Counsel of the assessee to the effect that AO has wrongly worked out the number of sale and purchase transactions is correct. During the year, the total transactions of purchases are just 36 and that of the sales are 49. We find considerable cogency in the submission of the ld. Counsel of the assessee that the AO has gone wrong in treating one transaction of purchase as multiple transactions merely because such purchase came from different sellers on the exchange. From the assessee perspective, it was a single order and hence it cannot be considered to be multiple transactions. Similar is the case of the sales made by the assessee. We have also perused the details and find that there is no intra-day transactions. In view of these facts, we are of the view that the AO s finding that there were many transactions entered in a single day, is incorrect. The AO has also referred to the balance sheet of the statement of affairs as on 31.03.2006, however, the same has been quoted on page 12 of the assessment order. On going through this balance sheet, we note that the total available funds with assessee as on 31.03.2006 was ₹ 3,48,19,641/- as aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious case laws relied upon by the Ld. DR, we have gone through each of these case laws. In the case of Manoj Kumar Samdaria Vs. CIT [2014] 45 Taxmann.com 394 (Delhi), the facts were that the assessee has given funds to a broker who traded the shares on behalf of the assessee on day to day basis and the dividend received was a meagre amount. Thus, this was a case where there was day to day trading by a broker on behalf of the assessee. Thus, this case law does not support the case of the revenue. As regards the reliance on the judgment of Bombay High Court in the case of CIT vs. Gopal Purohit 336 ITR 287 (Bomb) by the Ld. DR. we have gone through the same and we find that this judgment, in fact, support the case of the assessee. In this judgment, the Hon ble Bombay High Court has clearly held that delivery based transaction should be treated as those in the nature of investment and profit received there from should be treated as capital gain. In the present case, all the transactions are delivery based and hence by applying the above judgment, the income arising from such investment is to be treated as capital gain. As regards the judgment in the case of Dalhousie Investment Trust C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned above and respectfully following the precedents, as aforesaid, the AO is directed to treat the income as capital gain declared by the assessee as against business income. In the result, this ground of appeal raised by the Assessee stands allowed. 6. As regards ground No. 3 which is relating to disallowance of ₹ 1,22,222/- on account of traveling expenses. The AO has disallowed the same treating the 50% of the total expenses as personal. The Ld. CIT(A) has confirmed the action of the AO. It was contended by the Ld. Counsel of the assessee that this disallowance is unsustainable in view of the fact that in this year fringe benefit tax was applicable and assessee has offered 20% of the expenditure under FBT. Once and FBT has been paid, then no disallowance can be made on account of personal expenditure. On the other hand, Ld. DR relied upon the order of the authorities below. 6.1 We have heard both the parties and perused the records especially the orders of the authorities below. On perusing the AO s order, we note that the assessee before the AO has taken the stand that it has paid fringe benefit tax at the rate of 20%. Now it is a settled position of law that no dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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