TaxTMI 
TaxTMI 
2014 (7) TMI 427
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....unds raised by the Revenue, read as under:- "1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in treating the income of Rs. 50,25,48,525, as capital gain instead of business income as the assessee is trader in shares and not an investor. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in restricting the disallowance u/s 14A upto administrative expenses only, whereas the disallowance as per rule 8D of the Rules r/w section 14A in view of the decision in the case of Godrej & Boyce Mfg. Co. Ltd. v/s DCIT, works out to Rs. 87,16,813." 2. Before us, the learned counsel, Mr. Vijay Mehta, on behalf of the assessee, submitted that insofar as the issue raised i....
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.... in shares over the period of one year c) The assessee has borrowed funds to fund his activity for purchase and sale of shares. The presence of borrowed funds imparts the activity the color of trade rather than investment. d) The assessee has not furnished any reason for purchase neither has he furnished the reason for sale. In the absence of a definitive reason on the part of assessee what can be gauged from the facts is that the assessee has bought and sold depending on the volatility of the market. This behaviour resembles that of the trader. e) The assessee has argued that it has recorded the above purchases as investments therefore the income from the same should be treated as capital gains f) The recording in the books of ....
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....Appeals) noted down the reasons given by the Assessing Officer and observed that they are parimateria with the assessment order passed for the assessment year 2007-08 and 2008-09. In those years, the learned Commissioner (Appeals) has rejected the reasoning of the Assessing Officer and has upheld the contention of the assessee. The comparative details of number of transactions in the scrips undertaken, net gain, average period of holding, dividend received, etc., as compared to the assessment year 2008-09, has been noted by the learned Commissioner (Appeals) in the following manner:- Parameters Long Term Short Term Close-out i.e. not sale but compulsory auction A.Y. 09-10 A.Y. 08-09 A.Y. 09....
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....is independent and transaction has to be seen for this year and secondly, there is an element of borrowed funds, which cannot be segregated from the dealing of shares. 7. We have heard the rival contentions, perused the relevant findings of the authorities below and the material available on record. We find that the similar nature of issue has come up for consideration before the Tribunal in assessee's own case in the assessment year 2007-08 and 2008-09, wherein the Tribunal, in Revenue's appeal, has upheld the order of the learned Commissioner (Appeals) after observing and holding as under:- 6. We have considered the rival submissions and per used the orders of authorities below. The dispute is regarding the nature of income from sal....
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....rdingly the finding of the ld. CIT(A) is confirmed. Ground No.1 of Revenue's appeal is dismissed." 8. In this year also, it is an admitted fact that the reasoning given by the Assessing Officer and the learned Commissioner (Appeals) are akin to that of the earlier years and, therefore, consistent with the view taken by the Tribunal in earlier years, we uphold the finding of the learned Commissioner (Appeals) that the income derived by the assessee from the transactions of the shares is to be taxed under the head "capital gain" and not "income from business". Accordingly, ground no.1, raised by the Revenue stands dismissed. 9. Ground no.2, relates to restriction of disallowance under section 14A, made by the learned Commissioner (Appea....