2015 (10) TMI 526

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.... International Tractors Ltd. The assessee derived income from salary from the company; pension income from LIC of India Ltd.; income from house property; income from business of trading in derivatives; capital gains on investments; and income from other sources by way of interest dividend etc. The assessee filed its return declaring total taxable income of Rs. 2,49,31,890/-, which was revised to Rs. 2,53,74,610/-. The assessment was completed at a total income of Rs. 9,56,71,658/-, inter alia, making following adjustments/ disallowances: (i) Disallowance on a/c of loss on sale of gold Rs. 8,08,330/- (ii) Disallowance u/s 14A Rs. 86,76,130/- (iii) Disallowance u/s 40A(3) Rs. 6,24,29,244/- 2.1. In appeal, ld. ....

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....out of cash withdrawal of Rs. 635 lacs vide cheque no. 256265 dated 28-01-2008, drawn on HDFC Bank. The assessing officer was not satisfied with this explanation and after considering the definition of 'business' u/s 2(13) and relying on the decision of Hon'ble Supreme Court in the case of Mazgaon Dock Ltd. Vs. CIT 34 ITR 368, concluded that it was an adventure in nature of trade which was to be considered u/s 28. He, accordingly, held that the loss of Rs. 8,08,330/- was assessable as business loss and not as short term capital gain. Since assessee had admittedly made the purchase in cash, the assessing officer invoked section 40A(3) and made a disallowance of Rs. 6,24,29,244/-. 3.1. Before ld. CIT(A) it was clarified that the gold had b....

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.... 4. We have considered the submissions of both the parties and perused the record of the case. The facts are not disputed. The gold was purchased in FY 2007-08 on 28-1-2008. In the balance sheet on 31-3-2008 it was disclosed as assessee's investment and it was also shown in the assessee's wealth-tax return. Therefore, there was no evidence with the assessing officer to take a contrary view. The purchase and sale bills of gold as produced before ld. CIT(A) showed that the purchases and sales were made at prevalent market price of the gold. We, therefore, do not find any reason to interfere with the order of ld. CIT(A) on the issue in question. Ground nos. 1 & 2 are dismissed. 5. Apropos ground no. 3, brief facts of the case are that asse....

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.... years and therefore relying on the decision in the case of McDowell & Co. Ltd. v. Commercial Tax Officer 154 ITR 148 (SC), denied the carry forward of short term capital loss claimed at Rs. 12,12,07,282/-. 5.1. Ld. CIT(A) referring to section 45(2) observed that profit/ loss on conversion of investment as stock-in-trade on 2-5-2008 by taking NAV of the units of UTI mutual funds as on that date did not arise in the current year u/s 45(2). He, accordingly, held that issue was premature and in the absence of any short-term capital loss taking place in the current year, no adjudication on the issue of its carry forward was called for. However, ld. CIT(A) allowed the ground raised by assessee. 6. We have considered the submissions of both....