TaxTMI 
TaxTMI 
2017 (5) TMI 1644
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....nsactions. In Ground No. 2, the revenue has agitated deletion of disallowance u/s 14A of Rs. 6,25,414/- by Ld. CIT(A). 2. Briefly stated, the assessee, being resident individual, was assessed u/s 143(3) at Rs. 3,95,62,876/- as against returned income of Rs. 3,54,94,358/- e-filed by assessee on 14/08/2010. The assessee earned income from salary and trading in shares and reflected an amount of Rs. 2,62,28,530/- under the head Short Term Capital Gains against sale of certain scrips the holding period of which was more than 30 days. The gains from shares, the holding period of which was less than 30 days, were offered as Business Income. However, not convinced with the said classification made by the assessee and after appreciating the volum....
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....ffered disallowance for interest expenditure as wrongly observed by Ld. CIT(A) but for administrative expenses only, the quantum of which were as per the prescribed formula given in Rule 8D and hence justified. 5. Per Contra The Ld. Counsel for Assessee [AR] contended that the assessee was consistently bifurcating the said transaction in the same manner which was accepted by the revenue all throughout and hence, there was no reason to disturb the same. Further, as per settled judicial pronouncements, the assessee could maintain two separate portfoliosone for business and another for investment, which has been done by the assessee. Further, no borrowed funds were used by the assessee to make the said investments and average holding period....
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....eciation and/or for earning dividends and interest. (iii) Whether scale of activity is substantial; (iv) Whether transaction were entered into continuously and regularly during the assessment year. (v) Whether purchases are made out of own funds or borrowings; (vi) The stated objects in the Memorandum and Articles of Association in the case of corporate assessee; (vii) Typical holding period for securities bought and sold; (viii) Ratio of sales to purchase and holding. (ix) The time devoted to the activity and the extent t o which it is the means of livelihood. (x) The characterization of securities in the books of account and balance sheet as stockin- trade or investme....
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....Year, shall remain applicable in subsequent Assessment Years also and the taxpayers shall not be allowed to adopt a different/contrary stand in this regard in subsequent years; c) In all other cases, the nature of transaction (i.e. whether the same is in the nature of capital gain or business income) shall continue to be decided keeping in view the aforesaid Circulars issued by the CBDT. Further Apex Court in CIT v. Associated Industrial Development Co. (P.) Ltd. [1971] 82 ITR 586 (SC) has observed that:- "Whether a particular holding of shares is by way of investment or forms part of the stockin- trade is a matter which is within the knowledge of the assessee who holds the shares and it should, in normal circumstances,....
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.... the Appellant, impugned assessment order and the material available on record, The Appellant has reflected the shares as investment in the books of accounts. During the course of the appellate proceedings, the Appellant furnished the details of the Share transactions made during the year alognwith the copies of the purchase and sales bills, demat statements and bank statements. On perusal of the same, it appears that the appellant had duly recorded all the share transactions he had entered into. The Appellant had maintained two separate portfolios viz. investment portfolio and business portfolio. The appellant, on an average, has held scrips for around 72 days which also indicates that the shares were held for investment purposes. Had the ....