TaxTMI 
TaxTMI 
2016 (7) TMI 746
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....Act and declaring book profit u/s 115JB of the Act of Rs. 4,52,412/-. The assessment was completed u/s 143(3) of the Act on 3.7.2008 determining the total income 66,672/- under normal provisions of the Act after making disallowance u/s 14A of the Act in the sum of Rs. 841/- and determining the book profit u/s 115JB of the Act at Rs. 4,53,253/-. In the said assessment proceedings, the ld AO on perusal of profit and loss account including its schedules, directed the assessee to file the details of other income. The assessee filed the details stating that other income comprises of dividend income of Rs. 82,876/- , profit on sale of units of mutual fund of Rs. 1,40,176/- and profit on sale of derivatives of Rs. 16,950/- through portfolio management scheme (PMS) of Prudential ICICI Asset Management Company Limited. It was also stated by the assessee that the assessee had disclosed the other income earned through PMS other than dividend income, under the head 'income from business'. This plea of business income has been accepted by the ld AO while completing the assessment u/s 143(3) of the Act on 3.7.2008. Later this assessment was sought to be reopened u/s 147 of the Act for the follow....
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....uction towards business expenditure towards administrative expenses of Rs. 8,80,065/- comprising of salaries & bonus, staff refreshment expenses, bank charges& commission, interest paid to bank, travelling & conveyance , printing and stationery, repairs and maintenance, building repairs and maintenance, miscellaneous expenses, postage & stamps, rent, auditor's remuneration, car running & maintenance, stock exchange annual fees, trade licence & profession tax, legal expenses, licence & fees, filing fees, insurance, rates & taxes, electricity & water, books & periodicals, consultancy fees and securities transaction tax , apart from accepting the certain disallowances made voluntarily by the assessee in the return of income as per law. The ld DR vehemently relied on the order of the ld CIT. 5. We have heard the rival submissions and perused the materials available on record including the paper book filed by the assessee. The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. We find that the ld CIT sought to disallow only the insurance premium of Rs. 2,28,780/- and remaining depreciation on assets in the sum of Rs. 59,228/-. We....
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....s International vs ACIT in ITA No. 1368 (Del) of 2010 for Asst Year 2006-07 dated 16.12.2011 is very well founded, where it was held that :- "13. The assessee had made investment under PMS. The profit has not arisen directly from deposits made, but from the securities purchased from such deposits, which were traded by the portfolio manager on behalf of the assessee. The quantity of share traded is huge as is evident from the list appended with the assessment order. The shares have been traded frequently with a motive to maximize profit and not with a view to hold them as investment. The volume of the transaction is very high. All these facts indicate that the portfolio manager had in fact done trading on behalf of the assessee. There is no difference between similar transactions carried out by an individual in shares and the transactions carried out by portfolio manager. Such transactions can be compared with trading in commodities or real estate. If an assessee gives money to a property dealer with the instructions to purchase, get possession and sale at a reasonable profit keeping in view the market conditions. The property dealer acting as an agent enters into series of....
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....wards keyman insurance premium in the sum of Rs. 2,28,780/- by placing reliance on the CBDT Circular No. 762 dated 18.2.1998 which is binding on him. In fact, we find that the ld AO though had reopened the assessment initially on the pretext that there was no business carried on by the assessee and accordingly keyman insurance premium and depreciation are not allowable business expenditure, was thoroughly convinced on the fact that the assessee was carrying on business and allowed the deduction towards keyman insurance premium by placing reliance on the CBDT Circular No. 762 dated 18.2.1998 which Circular is actually binding on him. However, he proceeded to disallow the portion of the claim of depreciation on car as not used for business purposes as assessee had not substantiated the usage of the same for the purpose of business. These facts go to prove beyond doubt that the ld AO had duly applied his mind on the aspect as to whether the assessee had indeed carried on any business during the year or not. It is not in dispute that the ld AO had allowed the claim of other administrative expenses as allowable business expenditure. Hence it could be safely concluded that the ld AO had ....