TaxTMI 
TaxTMI 
2016 (2) TMI 623
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad as under:- "1. The order of the Ld. CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in directing the AO to treat the income of Rs. 95,92,653/- as STCG against business income assessed by AO. 3. On the facts and circumstances of the case the ld. CIT(A) has erred in law in directing the AO to charge the amount of Rs. 90,180/- as Short Term Capital Gain under the head 'Capital Gains' and not under the head 'Income from Business income' whereas the amount of addition was Rs. 95,92,653/-. 4. The appellant craves leave to add, amend an\y / all the grounds of appeal before or during the course of hearing of the appeal." 3. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be quashed as the same has been framed consequent to a search which itself was unlawful and invalid in the eye of law. 5 (i) On the facts and circumstances of the case, Ld Commissioner of Income Tax (Appeals) [CIT(A)] has erred both on facts & in law in making addition of Rs. 62,817/- invoking the provisions of Sec 14A of the Act. (ii) That the addition has been arbitrarily estimating the expenses related to exempt Income. 6. The respondent craves leave to add, amend or alter any of the grounds of cross objections. 4. The brief facts of the case are that the a search and seizure operation was initiated u/s. 132 in the Swastik Pipes Group of cases on 28.8.2008. The assessee company was covered in the search. No....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he same is dismissed as not pressed. 7. The issue in all the four grounds of appeal is one only i.e. regarding taxation of short term capital gain as business income. It was submitted by the learned DR that the AO has rightly assessed the income of Rs. 95,92,653/- as business income and the learned CIT(A) has erred in directing the AO to assess the same as short term capital gain. It was further submitted by him that in the assessee's Memorandum & Articles of Association in the object clause it has been stated that its business is investment in shares and debentures and hence the AO was right in assessing income arising from the investment in shares as business income. It was further submitted that AO has given cogent reasons for treatin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Assessee that under the Companies Act even for making investment the Memorandum & Articles of Association needs to have a clause permitting investment in shares. Further there is no bar. A trader can also make investment in shares and can have two portfolios. In support thereof, he placed reliance on the Order of the ITAT in the case of ACIT vs. Ascot Investments, ITA No. 4691/Del/2011 dated 27.04.2015 and Omkareshwar Properties (P) Ltd. vs. ITO, ITA No. 5754/Del/2013 dated 23.10.2015. 10. We have heard both the parties and perused the paper book, assessment order and the order of the Ld. IT(A). In the Revenue's appeal, though it has raised four grounds of appeal but the only issue is treatment of income of Rs. 95,92,653/- as short t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al gain and short term capital gain. From the details it is also evident that there are only few scripts in which assessee has made investment. There are no repeated transactions in the same script. There does not appear to be any organized activities as is normal in the case of a trader. There is no intra-day transaction. 12. The AO has referred to the Memorandum & Articles of Association to support its allegation that investment in scripts is the business of the assessee. We are of the view that this cannot be the basis for holding that the gain arising during the year is business income and not capital gain because the Memorandum of Association has an object of investment in equity shares, preference shares and debentures. Firstly eve....