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TMI Blog2019 (3) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing Co. Ltd [2017 (5) TMI 403 - SUPREME COURT OF INDIA] to the facts of the case, irresistible conclusion is that any addition made in violation of the above, cannot be sustained. We, therefore, while respectfully following the above line of decision allow grounds of assessee’s appeal and direct the learned AO to delete the same. Income from trading of securities - Correct head of income - income from short term and long term capital gain OR income from business - in respect of all the three years, CIT(A) had taken a consistent view that this receipt must be treated not as income from business but has to be treated as income from short term capital gain and long term capital gain - rule of consistency - HELD THAT:- A coordinate bench of this tribunal in the light of the decision of CIT vs Avinash Jain [2013 (1) TMI 315 - DELHI HIGH COURT] and CIT vs CNB Finwiz Ltd.[2014 (8) TMI 645 - DELHI HIGH COURT] held that the law on this aspect is fairly settled and in the facts and circumstances of the case, learned CIT(A) was right in directing the AO to treat the impugned receipt as income from capital gains and not as business income. In view of the consistent view on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Out of the loss of ₹ 23,23,079/-, the assessee had shown the net loss to the tune of ₹ 19,74,492/-after reducing the dividend income to the tune of ₹ 1,43,972/- , disallowance of expenses attributable to the exempt income to the tune of ₹ 3795/- and also reducing the disallowance u/s 14A of the Income-tax Act at ₹ 4,88,764/-. 3. Learned AO observed that the assessee is fully involved in the business of trading of securities of various nature and primarily held that the income shown under the head long term and short term capital gains had to be assessed under the head Income from business . The assessee submitted that she is an investor in individual capacity and her intention towards acquisition of mutual fund/debentures and income by way of dividend and/or long term/short term capital gains and not as business income. She further contended that she was studying the market herself in investing in mutual funds/debentures and did not take the help of any expert or professional for earning the same. Ld. AO, however, observed that the assessee has been engaged in the business of purchase and sale of equity/shares and also F O and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd conclusions reached by him in the appeal for the AY 2012-13 directed that the amount assessed by the learned AO as income from business be assessed under the head income from short term capital gains and long term capital gains as declared by the assessee. At the same time, learned CIT(A) upheld the findings of the learned AO in respect of addition u/s 14A read with Rule 8D and confirmed such an addition. Assessee, therefore challenged the addition u/s 14A read with Rule 8D whereas the Revenue challenged the deletion of ₹ 68,49,607/-. ITA No.5626/Del/2016 7. In so far as the addition u/s 14A is concerned, the main plank of argument advanced on behalf of the assessee is that the assessee herself disallowed a sum of ₹ 3795/- and without recording any reasons by the learned AO for not being satisfied with the correctness of the claim of the assessee in respect of such an expenditure in relation to the income which does not form part of the total income under the Act, learned AO jumped to the conclusion that such a disallowance has to be computed in accordance with the provisions under Rule 8D(2). Learned AR placed reliance on the decision of the Hon ble A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 8D(1)(a) also reflects this mandate of law. Further in the case of Godrej Boyce Manufacturing Co. Ltd (supra), the Hon ble Supreme Court held as under: The requirement for attracting the provisions of section 14A(1) of the Act is proof of the fact that the expenditure sought to be disallowed had actually been incurred in earning the dividend income. Prior to the introduction of sub-section (2) and (3) of section 14A of the Act by Finance Act,2006 with effect from April 2007, such a determination was requirement to be made by the Assessing Officer to the best of his judgment. Sub-section (2) and (3) of section 14A of the Act read with rule 8D of the Income-tax Rules 1962 merely prescribe a formula for determination of expenditure incurred in relation to income which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. Whether such determination is to be made on application of the formula prescribed under rule 8D or to the best judgment of the Assessing Officer, what the law postulates is the requirement of a satisfaction of the Assessing Officer that having regard to the account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in respect of all the three years, learned CIT(A) had taken a consistent view that this receipt must be treated not as income from business but has to be treated as income from short term capital gain and long term capital gain. 15. Absolutely, there is no dispute on the similarity of the facts permeating all through these years. In respect of AY 2010-11, the findings of the ld. CIT(A) are upheld by a coordinate bench of this Tribunal in ITA No.4106/Del/2015 whereas as stated supra, Revenuehas accepted such finding of the learned CIT(A) in respect of AY 2012-13. 16. We have gone through the order dated 23.8.18 in ITA No.4106/Del/2015. In identical factual matrix, a coordinate bench of this tribunal in the light of the decision of the Hon ble jurisdictional High Court in the case of CIT vs Avinash Jai, 362 ITR 441 (Del) and CIT vs CNB Finwiz Ltd., 369 ITR 228 (Del) held that the law on this aspect is fairly settled and in the facts and circumstances of the case, learned CIT(A) was right in directing the AO to treat the impugned receipt as income from capital gains and not as business income. In view of the consistent view on this aspect i.e. the view taken by the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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