TaxTMI 
TaxTMI 
2017 (3) TMI 84
X X X X Extracts X X X X
X X X X Extracts X X X X
....en, Ld. Departmental Representative represented on behalf of Revenue and Shri Manish Tiwari, Ld. Authorized Representative appeared on behalf of assessee. 2. Facts in brief are that assessee in the present case is a Private Limited Company dealing in share and mutual funds. The assessee for the year under consideration has filed its return of income declaring loss of Rs. 41,46,668/- which was processed u/s. 143(1) of the Act. Thereafter the case was selected under scrutiny and accordingly notice u/s 143(2)/142(1) of the Act was issued upon assessee. The assessment was framed u/s. 143(3) of the Act at a total income of Rs. 1,03,26,550/- after making certain additions / disallowances. 3. Solitary issue raised by Revenue in this appeal is th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s been shown as business income in the earlier years and subsequent year to the year under consideration. The transactions from the sale-purchase of mutual fund were treated as business income which was duly accepted by Revenue. However, AO disregarded the claim of assessee by observing as under:- i) The substantial share capital of the assessee is invested in mutual fund in comparison to the activities of granting of loan and advance. Therefore the major activities of assessee are in the nature of investment only. ii) The assessee itself has shown the loss on the transactions of mutual fund as loss of investment and no turnover of the sale-purchase of share has been reported in Tax Audit Report u/s. 44AB of the Act. iii) In the earli....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... including the findings of the assessing officer and other materials brought on record. It is noted the identical issue has come up for adjudication before my predecessor while disposing the appeal of the appellant for the assessment year 2006-07. The AO has treated the business loss claim on sale of units in Mutual Fund of Rs. 2,97,332/- as capital loss. On appeal, the Ld. CIT(A) vide order dated 17.10.2012 allowed the appellant's claim of treating such loss on Mutual Funds as business loss in place of short term capital loss. It is also seen that the contention of the AO for making the disallowance of the loss on sale of mutual funds by treating as capital loss was based on similar treatment of the claim of loss from transactions in Mutua....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly." Aggrieved by this, Revenue has come up in appeal before us. 5. Before us Ld. DR relied on the order of AO. On the other hand the ld. AR submitted that the AO has accepted the activity of sale purchase of the shares as business transactions but loss arising out of mutual fund has been treated as capital loss without any cogent reasons. The learned AR reiterated the submission as made before the learned CIT(A) and he supported the order of ld CIT(A). 6. We have heard rival contentions of both the parties and perused the materials available on record. The issue in the case relates to the treatment made by the AO for the loss claimed by the assessee for its mutual fund transactions as capital loss. However the ld CIT(A) treated the sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Gain or Business Income, shall take into account the following:- a) Where the assessee itself, irrespective of the period of holding the listed shares and securities, opts to treat them as stock-in-trade, the income arising from transfer of such shares/securities would be treated as its business income, b) In respect of listed shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as Capital Gain, the same shall not be put to dispute by the Assessing Officer. However, this stand, once taken by the assessee in a particular Assessment Year, shall remain applicable in subsequent Assessment Years also and ....