TaxTMI 
TaxTMI 
2016 (12) TMI 242
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....inst the confirmation of action of the AO by the ld.CIT(A) in treating the "Short Term Capital Gains" (STCG) of Rs. 13,77,568/- as income from business. 4. Facts relating to the above issue are that the assessee has shown STCG of Rs. 13,77,568/- on sale of investments. The AO observed that the activities of the assessee were of trading nature as he was involved in sale and purchase of shares and thus dealing in shares at a very frequent interval. The AO was of the opinion that the assessee was routinely involved in share transactions and therefore, the AO treated this gain as income from business by rejecting all the contentions of the assessee. 5. At the outset, the ld. AR fairly conceded that the issue involved in this ground is covered against the assessee by the decision of the Mumbai Bench of the Tribunal in assessee's own case in ITA No. 7881/Mum/2010 AY : 2007-08 dated 12.09.2012. 6. We have heard the rival submissions and perused the materials on records including the orders of authorities below. We find that an identical issue has been decided by the Tribunal in ITA No. 7881/Mum/2010(supra), against the assessee . The relevant operative portion of the order is rep....
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....n case the issue has been decided against the assessee. We, therefore , respectfully following the decision of the coordinate bench uphold the orders of authorities below in treating the STCG as income from business. 7. Grounds of appeal No.B is against the confirmation of the action taken by the AO in making the disallowance u/s 14A read with Rule 8D of Rs. 18,91,670/- by the ld. CIT(A). During the course of assessment proceedings, the AO observed that the assessee has earned dividend income and no expenses for the earning of the dividend income were apportioned and disallowed as per the provisions of section 14A of the Act. The assessee was asked vide show cause notice dated 24.11.2010 as to why the provisions of section 14A read with rule 8D should not be invoked which was replied by the assessee by submitting that the provisions of section 14A r.w.r 8D were not applicable to the assessee as no expenses have been incurred in relation to exempt income. However the AO brushing aside the contentions of the assessee invoked the provisions of section 14A read with rule 8D and made disallowance of Rs. 18,91,658/- comprising of Rs. 17,73,678/- under rule 8D(2)(ii) and Rs. 1,17,992/-....
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....,408 B Adhoc disallowance of depreciation on Motor car 28,555 C Adhoc disallowance of Telephone expenses 43,912 D Adhoc disallowance of office expenses 63,550 E Adhoc disallowance of conveyance 10,786 F Adhoc disallowance of Misc. expenses 15,278 G Adhoc disallowance of foreign expenses 1,73,752 J Adhoc disallowance of traveling expenses 2,04,596 12. The AO during the course of assessment proceedings found that the above said expenses from C to E were incurred by the assessee and charged to the profit and loss account which included personal element as the assessee could not prove the genuineness of the said expenses by producing the necessary documentary evidences. Therefore all these expenses were not incurred wholly and exclusively for the purpose of business and accordingly made the disallowance at the rate of 20% of total expenses Rs. 7,64,255/- as per para 6 of the AO order thereby calculating the disallowance at Rs. 1,52,851/- . The matter carried to the ld. CIT(A), who confirmed the expenses to the extent of 1/6 of the total expenses by following the order of ITAT in ITA No 6280/Mum/2008 AY 2005-06 ....
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....is partly allowed. ITA No.7362/Mum/2013(AY-2009-10) 14. Ground No.A is against the confirmation of addition of Rs. 27,49,000 by the ld.CIT(A) as made by the AO on account of commission income on the basis of AIR information available with the department by disregarding the facts that the assessee was following cash system of accounting. 15. Brief facts of the case are that the assessee was engaged in the business of commission agent and during the course of assessment proceedings, the AO found that the assessee has credited commission of Rs. 86,51,000/- whereas as per the AIR information available with the AO the commission received was Rs. 1.14 Cr. Accordingly, the AO called upon the assessee to explain the discrepancy of the amount of commission account for and as per AIR. In response to the said notice, the assessee vide letter dated 12.12.2011 submitted before the AO that he was following the cash system of accounting and therefore the commission received has been shown by the assessee on the basis of actual receipt from clients by following cash system of accounting whereas the income as per the AIR information was on the basis of accrual system of accounting and henc....
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.... 21. We find that the ld.CIT(A) upheld the action of the AO on the ground that the assessee failed to prove that one of his employees visited Shirdi for cracking the business deal with one of the client but relevant documents have not been submitted as to which employee was sent to Shirdi, to whom did he meet and what business purpose was served. Since, the assessee failed to controvert the findings of the AO before the ld.CIT(A) and here also no contrary documents were submitted by the ld.AR to disprove the finding of the ld.CIT(A), we confirm the findings of the lower authorities. Ground taken by the assessee is rejected. 22. The next ground is in respect of disallowance u/s 14A r.w.r 8D of the Act amounting to Rs. 18,23,688/-. We have already decided an identical issue in ITA No.3594/Mum/2012 (AY-2008-09) and therefore, our decision in ITA No.3594/Mum/2012 would, mutatis mutandis, apply to this ground also. The AO is directed accordingly. 23. The ground "Ë" is in respect of disallowance @ 20% of car expenses, car depreciation and telephone expenses amounting at Rs. 98,053/-. 24. The assessee debited motor car expenses Rs. 2,67,897/-, depreciation on motor car Rs. 1....