TaxTMI 
TaxTMI 
2015 (11) TMI 1202
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....rved in Para 6 of the order as under "in the present case, this has to be examined as to whether the assessee is dealer in shares or not" the Tribunal proceeded to examine the final accounts of the assessee to draw a conclusion on the above aspect A. In correct/mistaken reading of the final account of the assessee. B. As per the Judgment of the Hon'ble Supreme Court and the jurisdictional High Court has held that it is the frequency of the transaction the test which will decide whether the share were held in stock in trade or as investment. A. In correct/mistaken reading of the final account of the assessee: In Para 6 an investment of Rs. 6.20 Laces, is referred. This is not an amount which is relevant for determining sec.!4A disallowance because it represents a land purchased by the assessee at Delhi. The income of Rs. 728.23 Laces resulting in gain on short term investment has been offered for taxation @30% as against reduced rates provided u/s 111A @ 15% and long term capital gain as exempt u/s 1038 or an a reduced rate 20% u/s 112 of the Income Tax Act. The turnover of the transaction of in buying and purchases Shares in rupees:- While evaluating the balance ....
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....e Rs. 790.93 lakh. It was also a submission that the Tribunal has omitted to consider Schedule-6 of the balance sheet as on 31.03.2008 available on page 11 of the paper book and also relevant schedule for the balance sheet as on 31.03.2009 available on page 33 of the paper book and therefore, these are apparent mistakes which should be rectified. As against this, Ld. DR of the Revenue submitted that there is no mistake in the Tribunal order. 3. We have considered the rival submission. We find that three mistakes are pointed out in Para 6 of the tribunal order. First mistake is that the amount of Rs. 60.20 lakh noted by the Tribunal in Para 6 of the Tribunal order is in fact not an investment for earning tax free income and therefore, this should not be considered as a basis for deciding the disallowance u/s 14A of the Act and in the same manner, the amount of investment of Rs. 340.80 lakh as on 31.03.2009 is also not an investment for earning tax free income and therefore, this should also not be considered for deciding the disallowance u/s 14A of the Act. Regarding both these aspects, we find force in the submissions of the Ld. AR of the assessee to the extent that these two in....
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.... is dealing in shares merely because in one year, a different nomenclature is given to report the income because, generally trading income is not reported in net figure but is reported by showing opening stock, purchase, closing stock and sale. A specific approved method of valuing closing stock is also disclosed in such cases which has to be consistently followed by the assessee. In the present case, all these features are missing. Therefore, this judgment of Hon'ble Karnataka High Court is not applicable because the assessee is not dealer in present case." 5. Hence, we find that even as per the amended Para 6 as above, the result is same because in fact, the figures of investments as on 31.03.2008 & 31.03.2009 noted earlier were not the basis of the decision. The basis of decision was reporting of net income instead of reporting opening stock, purchase, sale and closing stock. This was also a basis of the decision that the assessee has not reported the method of valuing closing stock as required. These basis remain as before even after the amendment in Para 6. Moreover, other reasons are given in Paras 6.1 and 6.2 of the impugned Tribunal order because major discussion is ....
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....2008 of Rs. 60.20 lakh and as on 31.03.2009 Rs. 340.80 lakh. The basis of decision is this that assessee itself is showing income in the manner which does not suggest that the assessee is dealing in shares. In one year i.e. in AY 2008-09, the assessee is showing income of Rs. 728.23 lakh under the heading gain on short term investment and Rs. 62.70 lakh under the heading profit from derivative. The totals of these comes to Rs. 790.93 lakh and in AY 2009-10, the assessee is showing income of Rs. 10.13 lakh under the head profit from trading in securities and against this amount, under the head profit from trading in securities, in the previous year column, the assessee is showing income of Rs. 790.93 lakh, which is the total of income of Rs. 728.23 under the heading gain on short term investment and Rs. 62.70 lakh under the heading profit from derivative. Based on these facts and also this fact that the assessee company has not reported the transaction in share in the form of opening stock, purchase, closing stock and sales and showing net income there from along with this fact that the assessee is not disclosing the method of valuing closing stock of share. Inference has been drawn....