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TMI Blog2020 (4) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... paid security transaction tax on all the shares that have been purchased. Since the above submissions of the Ld. Counsel for the assessee is contrary to the findings given by the lower authorities, therefore, considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the AO with a direction to adjudicate the issue afresh in the light of the submissions made by the assessee. AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. While doing so he is also directed to examine the treatment given by him in the preceding and subsequent year on similar transactions carried on by the assessee - Assessee appeal allowed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 35D and relying on various decisions the AO disallowed the amount of ₹ 2,67,847/- claimed by the assessee as revenue expenditure on account of filing fees paid to ROC for increase in the share capital. 4. The AO further noted that the assessee has treated the profit from share transactions amounting to ₹ 93,08,807/- as short term capital gain. From the various details furnished by the assessee he noted that the assessee is categorizing some shares as investment while some other scrips have been treated as stock in trade in the books of account. He noted that the assessee is maintaining common accounting system for both the trading and investment portfolios and is showing income from trading in shares as well as capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the year have not been sold by the assessee. The average period of holding of shares is 156 days and assessee is maintaining separate set of books of accounts for investments made and stock-in-trade. The assessee has made investment and traded only in mutual funds and not in shares. The assessee has paid security transaction tax on all purchases. Further the revenue authorities in the preceding years as well as in succeeding years have accepted capital gain u/s.45 of the IT Act. He submitted that in the preceding years the AO has accepted the short term capital gain and in the subsequent years also the short term capital gain has been accepted, therefore, for the impugned assessment year treating the short term capital gain as business in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 6116/2014 9. The Ld. Counsel for the assessee also relied on the decision of the coordinate Bench of the Tribunal in the case of M/s. Gyan Enterprises (P) Ltd. Vs. DCIT and in ITA No.6116/Del/2014 order dated 19.10.2015 in A.Y.2008-09 and 2010-11 respectively. 10. The Ld. Counsel for the assessee further submitted that the total investments made by the assessee is ₹ 123 crores and holds inventory of about ₹ 11 crores and has not even done sale/ purchase of 5% of the total investment during the year. 11. The Ld. DR on the other hand heavily relied on the order of the AO and the CIT(A). He submitted that the Ld. CIT(A) has given valid reasons while upholding the action of the AO in treating short term capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of shares shown as investment on the first day of the accounting year, the assessee has also traded in quoted shares during the year part of which has been disclosed as business income. The assessee is regularly trading in shares over the years and, therefore, there is no justification for treating the transaction as disposal of investments. It is the submission of the Ld. Counsel for the assessee that out of 72 transactions 41 transactions relate to transactions out of opening stock and whatever shares have been purchased during the year have not been sold. It is the submission of the Ld. Counsel for the assessee that it trades only in mutual funds and not in shares. Further the assessee has also paid security transaction tax on all th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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