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TMI Blog2020 (4) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,78,125/-. The AO passed the assessment order u/s 143 (3) of the Act determining the total income of Rs. 1,78,130/- inter alia making addition of Rs. 9,74,375/- on account of disallowance u/s 14A of the Act and treating the income of Rs. 74,05,599/- under the head income from business or profession against the claim of the assessee as Short Term Capital Gain. The assessee challenged the assessment order before the Ld. CIT (A). The Ld. CIT (A) after hearing the assessee dismissed the appeal. Against the said findings of the Ld. CIT (A), the assessee is in appeal before the Tribunal. 2. The assessee has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- 1. "The learned Commissioner of Income (Appeal) erred om treating an amount income of Rs. 74,05,599/- under the head 'income from Business or Profession' instead of ' income from Short Term Capital Gains' disclosed by the appellant and while doing so he amongst others failed to appreciate that:- (a) The income arising on transfer of the capital assets held by the appellant by way of shares was on account of the investments held by the appellant. (b) The income disclosed by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a separate and independent, the Ld. CIT(A) has rightly confirmed the action of the AO in the light of the facts of the case. However, the Ld. DR did not point out any material change of facts in the present case. 5. We have heard the rival submissions and perused the material on record including the decision of the coordinate Bench rendered in assessee's appeal ITA No. 2285/Mum/2010, relied upon by the assessee. We notice that the coordinate Bench has dealt with the identical question in assessee's own case for the assessment year 2006-07 and vide order dated21.08.2013, the Tribunal has decided the identical issue in favour of the assessee holding as under:- "7. After considering the order of AO, CIT(A) and the submission of the assessee, we find that the assessee deserves to succeed on the issue involved. It is seen that the assessee has shown all the purchases under the investment portfolio. It is further seen that the long term capital gain shown by the assessee has been accepted by the AO himself. Under the provision of law, it is clearly provided that if the holding of share is more than one year then the gain on account of sale of shares has to be treated as long term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment Company (P) Ltd. (82-ITR-586), the Hon‟ble Supreme Court has held as under: "Whether a particular ho/ding of shares is by way of in vestment or forms part of the stock-in-trade is a matter which is within the knowledge of the assessee who holds the shares and he should, in normal circumstances, be in a position to produce evidence from his records as to whether he has. maintained any distinct/on between those shares which are his stock-in-trade and those which are held by way of in vestment." 12.1 In the case of CIT, Bombay vs H Holck Larsen (160-ITR-67), the order to determine whether one was a dealer in shares or an investor, the question was not whether the transaction of buying and selling the shares lacks the element of trading, but whether the later stages of the whole operation show that the first step - the purchase of the shares - was no ken as, or in the course of a trading transaction. The totality of all the facts will have to be borne in mind and the correct legal principles applied to these. If all the relevant factors have been taken into consideration and there has been no misapplication of the principles of law, then the conclusion arrived at by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain and revenue has duly accepted the same. The assessee was not holding the shares of the units as a stock in trade. This fact is also not denied by the revenue. The period of holding itself has been treated by the legislature to be a relevant consideration for determining whether the capital gain derived is a long term capital gain or a short term capital gain. There is no provision under the Income-tax Act which has provided that in case the assessee is holding the shares for a lesser period than the one prescribed, it will be regarded to be the business income. Dividing the capital gain into two parts i.e. the short term gain or the long term gain itself prove that the period of the holding cannot be the criteria for determining whether the profit derived by the assessee is a long term capital gain or short term capital gain. 16. The CIT(A), we noted in this case while allowing the appeal of the assessee has relied on the decision of the ITAT Nagpur bench in the case of Dineshbhai C. Patel (HUF) in 1TA No.616/2008, which confirmed the decision of the C1T(A), the copy of the decision was filed before us. The appeal against the decision of the Nagpur Bench in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the decision of this Tribunal in ITA No.616/2008 in the case of ACIT Vs. Dineshbhai C. Patel (HUF) is clearly applicable in the case of the assessee. The decision of the coordinate bench which has been approved by the Hon‟ble jurisdictional High Court is binding on us. We cannot take a different view. We noted that the Nagpur Bench of this Tribunal in the case of Dineshbhai C. Patel "I (supra) has followed the decision of Gopal Purohit Vs. "JCIT (supra), that decision has ,also been approved by the Hon‟ble jurisdictional High Court and SLP against that decision has been dismissed by the Supreme Court We accordingly, confirm the order of the CIT(A) and dismiss both the appeals." 10. Similar facts are involved for the assessment year 2007-08, the year under consideration. Therefore, we see no reason to interfere in the finding of the learned CIT(A), who allowed the issue in favour of the assessees following the decision of its predecessor for assessment year 2006-07 and the same has been confirmed by the Tribunal as stated above. Accordingly, we confirm the order of the CIT(A) in both the cases." 8. Since facts are similar in the present case, therefore, in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the assessee. We notice that the Ld. CIT (A) has confirmed the disallowance amounting to Rs. 9,74,375/- computed by the AO against the exempt income of Rs. 4,21,042/-, which is contrary to the ratio laid down by the Hon'ble Delhi High Court in the case of Joint Investments, as the disallowance confirmed by the Ld. CIT (A) is more than the exempt income earned by the assessee. The Hon'ble Delhi High Court in the case of Joint Investments vs. CIT, (2015) 59 taxmann.com 295, has held that section 14A and Rule 8D cannot be interpreted to mean that the entire tax exempt income can be disallowed. The observations of the Hon'ble Court read as under:- "9. In the present case, the AO has not firstly disclosed why the appellant/assessee's claim for attributing Rs. 2,97,440 as a disallowance under s. 14A had to be rejected. Taikisha Engg. India Ltd. (supra) says that the jurisdiction to proceed further and determine amounts is derived after examination of the accounts and rejection if any of the assessee's claim or explanation. The second aspect is there appears to have been no scrutiny of the accounts by the AO-an aspect which is completely unnoticed by the CIT(A) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making an investment. (c) The appellant had maintained separate books for the investments made and the business activities carried on of trading in shares. (d) As in the earlier years, the appellant continued to be an investor in shares. (e) The appellant was not a trader vis-à-vis the shares, which have yielded income/Loss under the head 'Short Term Capital Gains/Loss', as disclosed in the return of income filed. 2. The learned Commissioner of Income (Appeal) Tax erred in making an addition of Rs. 71,00,000/- under section 2(22)(e) without appreciating the fact that the Appellant had paid back Rs. 34,59,559/- & only received Rs. 36,40,442/- from the Jogani Construction Limited. 3. The learned Commissioner of Income (Appeal) erred in treating Rs. 3,24,673/- as interest income on Fixed Deposit and Saving Bank Interest as income from other sources as against business income." 2. This ground of appeal is identical to the first ground of appeal of the assessee raised in ITA No. 6798/Mum/2018 pertaining to the AY 2012-13 aforesaid. We have decided this issue in favour of the assessee by following the decision of the coordinate Bench in assessee's own case ITA No. 2285 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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