2016 (8) TMI 152

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....["the Act"] despite insertion of Section 145A by relying upon the decision of the Supreme Court in the case of Commissioner of Income Tax v. Lakshmi Machine Works, reported in [2007] 290 ITR 667 [SC] by totally overlooking the fact that the same related to assessment prior to April 1, 1999, the date of coming into operation of Section 145A. [B] Whether the Tribunal below committed substantial error of law in directing the Assessing Officer to treat the profit on sales of shares as "capital gain", both on longterm basis and shortterm basis as claimed by the assessee and not as "business income", by not taking into consideration the well settled principles which are followed for deciding this type of a case. [C] Whether the Tribunal bel....

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....com 240 has made following observations. "4. With respect to proposition that Rule 8D is not retrospective in operation, we have no hesitation in agreeing with the decision of the Bombay High Court in the case of Godrej Boyce & Manufacturing Co. (supra). Previously also, we had occasion to deal with the said Rule and held as and the Bombay High Court has done. That, however, does not mean in our primafacie opinion that no disallowances can be made under Section 14A of the Act by bifurcating the expenditure in a reasonable manner towards earning of the taxable income and tax exempt income." 4. This judgment was referred to and followed in a later judgment in case of Commissioner of IncomeTax v. Torrent Power Ltd., reported in [2014] 36....

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.... borrowed funds have been invested in shares and the shares are held as investment and relying on the case laws relied upon by the Ld. A.R., it is held that, the profit on sale of shares should be taxed as capital gains both long term and short term as claimed by the appellant. This ground is thus allowed." 7. The decision of Commissioner of Income tax (Appeals) was confirmed by the Tribunal by the impugned judgment observing as under: "On hearing the submissions of both the sides, some specific funding on facts have been given by the Learned CIT(Appeals) that the shares in question of Oriental Bank of Commerce were shown as an investment from 1/06/1995 and shares of IPCL have also been shown as an investment from 31/03/2001 onwards a....