TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1303
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.... Rs. 8,60,074/-. During the course of assessment proceeding, the Assessing Officer observed that the assessee has sold share of M/s J.T. Agro Goods Pvt. Ltd. on 10.06.2010 for Rs. 60,00,000/-. Against the said receipt/sale, the assessee declared net profit of Rs. 26,00,000/- after deducting purchase cost of shares of Rs. 3,00,000/- and claiming deduction u/s 35 amounting to Rs. 54,75,000/- on account of donation made of Rs. 31,00,000/- towards scientific research to M/s Himalaya Trust Dehradun. The assessee accordingly declared income of Rs. 8,60,074/-. 3. During the course of assessment proceedings, the Assessing Officer asked the assessee to justify the claim of deduction u/s 35 of the I.T. Act. The assessee filed her reply along with th....
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....copy of bank account in which the amount of purchase of said shares have been reflected. Subsequently, these persons filed the relevant details. The Assessing Officer, thereafter, asked the assessee to explain as to why the income claimed as business income should not be treated as "income from short term capital gain" and the deduction claimed of Rs. 54.75 lacs u/s 35 of the I.T. Act should not be disallowed. In absence of any explanation filed by the assessee and observing that the assessee had not declared in the past any business income and there was no opening or closing stock of shares, the Assessing Officer disbelieved the business income on account of sale of shares and treated the same as "short term capital gain". The Assessing Of....
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.... Agency Ltd. reported in 100 ITR 706, he submitted that the Hon'ble Supreme Court in the said decision has held that a single transaction of purchase and sale outside the assessee's line of business may constitute an adventure in the nature of trade. It is not necessary to constitute trade that there should be a series of transactions, both of purchase and sale. 7. Referring to the decision of the Hon'ble Supreme Court in the case of G. Venkataswami Naidu & Co. vs. CIT reported in 35 ITR 594, he submitted that the Hon'ble Supreme Court in the said decision has held that in cases where the purchase has been made solely and exclusively with the intention to resell at a profit and the purchaser has no intention of holding the prop....
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....7/2014 dated 12/03/14. e. Equity Intelligence India (P.) Ltd. vs. ACIT, 61 taxmann.com 256. d. Dilip Battu Karanjule vs. ITO, 74 taxmann.com 12. 10. He accordingly submitted that when the transaction is not in dispute and the Assessing Officer has accepted the purchase and sale to be genuine, therefore, merely because assessee has held the shares for a short period, the same cannot be considered as short term capital gain as against business income treated by the assessee. 11. Ld. counsel for the assessee further submitted that the ld. CIT(A) was not justified in denying the benefit of deduction u/s 35 of the I. T. Act when the assessee has fulfilled the requisite conditions. 12. Ld. DR on the other hand heavily relied on the orde....
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....e statement recorded did not doubt the genuineness of the transactions. However, in absence of such business income declared on account of sale of shares in the preceding year and in absence of any opening or closing stock of shares, the Assessing Officer treated the profit from sale of shares as short term capital gain as against business income declared by the assessee. According to the Assessing Officer, the so-called purchase of shares are manipulated only to claim the deduction u/s 35 of the I.T. Act out of the donation made of Rs. 31,00,000/- and evade the tax. 14. We find, in appeal the ld. CIT(A) upheld the action of the Assessing Officer in considering the profit from sale of shares as short term capital gain. He, however, allowed....
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..... The donation has also not been disbelieved. Under these circumstances, we have to consider as to whether the profit on sale of such shares will constitute an adventure in nature of trade as claimed by the assessee or short term capital gain as treated by the Assessing Officer and upheld by the ld. CIT(A). 16. We find the Hon'ble Supreme Court in the case of Sutlej Cotton Mills Supply Agency Ltd. (supra) has held as under (short notes) :- "It is not necessary to constitute trade that there should be a series of transactions, both of purchase and of sale. A single transaction of purchase and sale outside the assessee's line of business may constitute an adventure in the nature of trade. Neither repetition nor continuity of similar tr....