2017 (8) TMI 746

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....assessment of Business loss in Share trading as capital gains and not allowing the set off of Brought forward business losses. The assessee is engaged in the business of transport and in share trading. For the assessment year 2009-10, the assessee filed return of income admitting business loss on account of trading in shares amounting to Rs. 37,87,504/- and Profit from the transportation business of Rs. 82,26,385/-. The assessee claimed the set off of share trading loss from the business profit of the transport business. The assessee has incurred loss of Rs. 36,58,780/- in the assessment year 2008-09, which was as set off against the current years business income and furnished return of income admitting total income of Rs. 24,54,170/-. T....

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....  s hare                         s   1 HimachalFu Touristic Coo muni- cation Ltd. HFCL 17.12.07 21951 10000 44.6 446000 4.11.08 50,304 6,000 7.08 425,000     18.12.07 64070 10000 39.25 392500               19.12.07 22527 10000 43.05 430500               2.1.08 68842 20000 51.00 1019930     &n....

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....          Total Loss  3165143                       5.1 It is seen that the AO has applied the CBDT circular No.4/2007 to determine whether the transaction is one of the capital gains or business income. It is seen that the assessee has not purchased any new shares during the year and the claim that it was involved in trading of shares is not sustainable. I find that the AO has rightly concluded that the transaction is not business in nature and would result only in capital loss. Accordingly the AO's action in not allowing the loss relating to A.Y.2008-09 and the current year on account of purc....

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.... loss. The Ld. A.R. further stated that in the Balance sheet, the assessee has declared the closing stock as a business asset but not as an investment. Since the financial statements and the conduct of the assessee clearly shows that the assessee is actively involved in the purchase and sale of shares with an intention to do the business, the Ld. A.R. argued that both the CIT(A) and the A.O. has made a blatant error and require interference from this Tribunal. 4. On the other hand, the Ld. D.R. argued that merely because of the return of income is accepted u/s 143(1), it should not be treated as an assessment framed u/s 143(3) of the Act. The Ld. A.O. has considered all the details and intention of the assessee, sources of funds frequenc....