TaxTMI 
TaxTMI 
2018 (3) TMI 1303
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....f 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 the Audit Report in which it was mentioned that the assessee is "trading in land". The assessee filed another Audit Report mentioning therein that actually the assessee is trading in shares and not trading in land and it was a clerical mistake. The Assessing Officer, during the course of assessment proceedings, asked the assessee to file supporting evidences regarding the business activities as claimed by the assessee. From the various details furnished by her, he observed that the assessee purchased shares of a private limited company M/s J.T. Agro Good Pvt. Ltd. for Rs. 3,00,000/- on 28.09.2009 and sold the same for Rs. 60,00,000/- on 10.06.2010. The assessee filed the confirmations on sale of shares and the relevant details along with the Audit Report of M/s J.T. Agro Good Pvt. Ltd.. The Assessing Officer also recorded the statements of the....
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....d to deduction u/s 35 in the absence of business income. 5) Holding that the sale of shares was not business income even if the intention was to start any carry on such business." 6. Ld. counsel for the assessee at the outset strongly challenged the order of the ld. CIT(A). He submitted that business includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. Referring to the decision of the Hon'ble Supreme Court in the case of CIT vs. Sutlej Cotton Mills Supply 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....
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....CIT(A). Referring to the decision of the Mumbai Bench of the Tribunal in the case of ACIT vs. Narendra I. Bhuva reported in 90 ITD 174, he submitted that the Tribunal in the said decision has held that for determining the trade transaction as 'adventure in nature of trade' it depends on a number of relevant circumstances such as (i) subject-matter of transaction, (ii) length of period of ownership, (iii) frequency of number of similar transaction by same person, (iv) supplementary work on or in connection with property realized and (v) circumstances that were responsible for realization and motive. Accordingly, it was held that when the assessee was not a trader or businessman, purchase of antique car and sale of the same was not to be held to be adventure in nature of trade. 13. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the ld. CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has purchased 6,00,000 shares of M/s J.T. Agro Good Pvt. Ltd. at the rate of 0.50 paise per share from M/s Banwari Exim P. L....
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....so-called transaction of shares of one private company is just to claim the deduction u/s 35 of the I.T. Act on the donation of Rs. 31,00,000/-. 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 transactions is necessary to constitute a transaction an adventure in the nature of trade. If there is repletion and continuity, the assessee would be carrying on a business and the question whether the activity is an adventure in the nature of trade can hardly arise. A transaction may be regarded a....