2016 (4) TMI 733

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....erred in law and on facts in confirming disallowance u/s 14A to the extent of Rs. 10,000/-. 2. The ld. CIT(A) erred in law and on facts in confirming the action of the ld. AO in treating the "capital gain" as "income from business". 3. The appellant may be allowed to add, amend, alter or raise additional grounds of appeal. 2. Briefly stated facts are that the assessee is a Private Limited company mainly engaged in the business of pharmaceuticals, research, development laboratory and investment activities. The assessee filed its e-return on 19.12.2006 declaring total income at Rs. 3,49,120/-. The case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued on 10.10.2007 which was duly served. The....

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....sst. year 2004-05 ld. CIT(A) has allowed the appeal of the assessee by treating the income arising from sale of units of mutual funds as capital gain and not as business income and, therefore, income from sale of shares and mutual funds should have been accepted to be taxed as capital gains and not as business income. 7. On the other hand, ld. DR supported the orders of lower authorities. 8. We have heard rival contentions and perused the material on record. The only issue before us is to examine the taxability head for income from sale of shares as to whether it has to be treated as capital gains or income from business. From going through the record, we find that the assessee company is mainly dealing in pharmaceuticals, laboratory ....

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.... per the table referred above we find that assessee's investments in shares have increased from Rs. 3.54 crores in FY 2002-03 to Rs. 5.43 crores in FY 2005-06; whereas business turnover has drastically decreased from Rs. 3 crores in FY 2002-03 to Rs. 0.64 crores in FY 2005-06. We further observe that major portion of net profit which was flowing out of the business activities upto FY 2002-03 have shifted to the investments income so much so that in the year under appeal net profit of the assessee is Rs. 0.44 crores which is equivalent to the other income and there is hardly any income from business activities. 10. Further from going through the records we find that in past assessee's claim have been accepted by the Revenue authorities by....

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....ts have been filed to rebut the findings-of the AO. It is therefore held that the AO was justified in his action. Accordingly the grounds no.2,3 & 4 are dismissed. 11. From going through the order of ld. CIT(A) we find the same to be a non-speaking order because of following two reasons :- (i) No evidence/documents were filed by the assessee to rebut the findings of the Assessing Officer before ld. CIT(A). (ii) No analysis was made by ld. CIT(A) from the available assessment records. 12. We are, therefore, of the view that looking to the facts and figures of the case for the year under appeal as well as the figures of past years it was necessary on the part of ld. CIT(A) to have adjudicated the issue in the light of ....