TaxTMI 
TaxTMI 
2010 (2) TMI 730
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....sed the appeal. 3. Being aggrieved by the order of the ld. CIT(A) the assessee is in appeal before us. 4. Ground No.1 is against in treating the short term capital gains of Rs.7,62,892/- as business income. 5. The brief facts of the above issue are that during the course of assessment it was interalia observed by the AO that the assessee has claimed short term capital gain of Rs.8,89,846/-. The assessee was asked to state the reasons as to why short term capital gains should not be treated as trading income from professional services. It was explained by the assessee that the business of the assessee was financing and money lending as per object clause of the partnership deed, the shares were held by the assessee as investment and not stock in trade, the portfolio manager's services were engaged to look after the share portfolio, the assessee had substantial dividend income of Rs.50,277/-, the shares were held in the DMAT account for fairly long time, the shares were not frequently or regularly dealt with, own funds were used for the purpose of investment and the transactions were delivery based and payments have been made to the broker on bill to bill basis....
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....Bharat Kunverji Kenia vs. Addl. CIT in ITA No.6544/Mum/2008 for A.Y. 2005-06 dated 15.5.2009. 4. Shri Kunvarji Nanji Kenia vs. Addl. CIT in ITA No.6545/Mum/2008 for A.Y. 2005-06 dated 28.4.2009. 5. Shri Gopal Purohit vs. JCIT in ITA No.4854/Mum/2008 for A.Y. 2005-06 dated 10.2.2009. 6. CIT vs. Gopal Purohit in Income Tax Appeal No.1121 of 2009 judgment dated 6.1.2010 of Hon'ble Bombay High Court He further submits that the ld. CIT(A) in the assessee's own case for the Assessment Year 2006-07 has accepted the short term capital gain as shown by the assessee. He further submits that the assessee has complied with all the tests as laid down in CBDT Circular No.4 of 2007 dt.15.6.2007 to show that the transaction should be treated as investment vide page 11 to 14 of the assessee's paper book. He further submits that in the balance sheets for the year ended 31.3.2004 and 31.3.2005 appearing at page 26 to 29 of the assessee's paper book the assessee has shown the investment in shares as investment. He therefore submits that the short term capital gains shown by the assessee be treated as short term capital gain and not as business income. 7. On the ....
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....bunal in the above cases relied on by the ld. Counsel for the assessee wherein it has been consistently held that the profit on sale of shares is assessable under the head short term capital gain, hold that the share transactions are in the nature of investment and the profit received therefrom is assessable as short term capital gain as shown by the assessee. The grounds taken by the assessee in this regard are therefore allowed. 11. Ground No. 2 is against the sustenance of disallowance of car expenses and depreciation thereon. 12. The brief facts of the above issue are that it was observed by the AO that the assessee has claimed motor car expenses of Rs.74,792/- and depreciation thereon Rs.1,34,642/-. In the absence of any material to show that the entire expenses have been incurred in relation to business, the AO disallowed 20% of such expenses including depreciation aggregating to Rs.41,886/- and added to the income of the assessee. On appeal, the ld. CIT(A) while observing that the personal use of the car is not ruled out and keeping in view that the corresponding disallowance of depreciation has to be made in view of the provisions of Sec.38(2) of the Act, di....
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.... Rs.40,004/- and added to the income of the assessee. On appeal the ld. CIT(A) while observing that the bills do not speak anything and the purpose of expenses is not clear, agreed with the finding of the AO and confirmed the disallowance. 18. At the time of hearing the ld. Counsel for the assessee submits that all the expenses have been incurred for business purposes as the assessee is engaged in the business of financing. The assessee has to, on a regular basis, inform and educate its clients with respect to the various new products and schemes by way of conducting various seminars and meetings wherein all the clients are invited. As a result, the firm has to incur various expenses for the refreshments and in some case lunch for the clients. He further submits that all the expenses are vouched and verifiable, supported by bills and the payment was made by account payee cheques except in one case where the payment was made in cash for Rs.1,261/- duly reflected in the bank statement. He therefore, submits that the expenditure has been wholly incurred for business purposes, allowable as a revenue expenditure under the Act. The reliance was also placed on the decision of the ....