TaxTMI 
TaxTMI 
2025 (3) TMI 1611
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....stead of taxing the same as 'Capital Gains'. 3. In facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the addition made by the Assessing Officer of Rs. 16,56,000/- in respect of alleged profit on sale of shares of Reliance Petro Chemicals Ltd. 4. The Ld. CIT(A) has erred in directing the Assessing Officer to levy interest u/s. 234A and 234B of the Act. 5. The Ld. CIT(A) and the Assessing Officer have failed to appreciate that the appellant could not pay tax due to legal impossibility arising out operation of law. 6. In the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not entertaining the additional grounds filed by the appellant challenging the following : a) Addition of Rs. 13,77,00,000/- on account of interest accrued on 17% NTPC Bonds. b) Addition of Rs. 65,00,000/- on account of interest accrued on 13% NLC Bonds c) Not granting deduction in respect of interest expenditure of Rs. 13,61,09,436/- d) Levy of interest u/s. 234A and 234B without appreciating that TDS was deductible in respect of certain income. 7. The order passed....
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....1-3-1992 shares after 8-6-1992 as per the information received from custodian Difference 1. Grasim 55,325 50,325 (-) 5,000 2. Gujarat Ambuja Cement 1,19,000 68,500 (-) 50,500 3. J.C.T. Industries Ltd. 46,625 37,561 (-) 9,064 4. R.P.L. 19,71,700 16,85,700 (-) 2,76,000 5. L&T 3,08,080 1,62,120 (+)1,54,040 6. Eicher Tractors 12,200 21,960 (+) 9,760 7.1. From the above chart, the AO found that there is reduction in the shareholding as under:- Sl. No. Scrip Reduction in holding Market price share as on 8-6-92 Average cost price Profit 1. Grasim 5,000 490 227 13,15,000 2. Gujarat Ambuja 50,500 352 154 99,99,000 3. J.C.T. Industries 9,064 100 128 (-) 2,53,792 4. R.P.L. 2,76,000 26 20 16,56,000 5. L&T 3,640 200 - 7,28,000 1,34,44,208 8. The reduction in shareholding is treated as unaccounted sales and addition of Rs. 1,34,44,208/- was made. Before the ld. CIT(A), it was strongly contended that 7850 shares of Grasim were sold on 09/....
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....ts Circular which reads as under:- Circular No. 6 of 2016, dated February, 2016. Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes North Block, New Delhi, the 29th of February, 2016 Sub: Issue of taxability of surplus on sale of shares and securities - Capital Gains or Business Income - Instructions in order to reduce litigation - reg.- Sub-section (14) of Section 2 of the Income-tax Act, 1961 ('Act') defines the term "capital asset" to include property of any kind held by an assessee, whether or not connected with his business or profession, but does not include any stock-in-trade or personal assets subject to certain exceptions. As regards shares and other securities, the same can be held either as capital assets or stock-in-trade/ trading assets or both. Determination of the character of a particular investment in shares or other securities, whether the same is in the nature of a capital asset or stock-in-trade, is essentially a fact specific determination and has led to a lot of uncertainty and litigation in the past. 2. Over the years, the courts have laid down different parameters t....
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....ess of the transaction itself is questionable, such as bogus claims of Long Term Capital Gain / Short Term Capital Loss or any other sham transactions. 5. It is reiterated that the above principles have been formulated with the sole objective of reducing litigation and maintaining consistency in approach on the issue of treatment of income derived from transfer of shares and securities. All the relevant provisions of the Act shall continue to apply on the transactions involving transfer of shares and securities." 11. From the above circular, it is clear that it is the assessee who decides whether the shares are held as investment or stock-in-trade and if the assessee decides that the shares are held as investments, the AO has to assess the gains as such. From the above charts it can be seen that the assessee has earned long term capital gains on sale of shares of Grasim Industries Ltd. and Gujarat Ambuja Cement. The said capital gains from two companies were included in the aggregate long term capital gain of Rs. 2,70,97,356/- earned by the assessee during the year which can be seen from the copy of computation of income. From the above chart it can be seen that the sha....
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....In A.Y. 1992-93 2 Reliance Petrochemicals Ltd- Shares 19,75,500 RPL-C Deb. Converted into Equity Shares in ratio of 15:1 on 01-12-1991 3 Reliance Petrochemicals Ltd- Shares - 5,68,300 RPL Shares were sold and Capital gains offered in A.Y. 1992-93 4 Reliance Petrochemicals Ltd- Shares 14,07,200 Closing Stock of RPL Shares as on 31- 03-1992 5 Reliance Petrochemicals Ltd- Shares 14,07,200 RPL Shares were not sold during A.Y. 1993-94 therefore closing stock is same as on 31-03-1993 15.1. Thereafter, the contract notes are on record from pages 147 onwards. Vide reply dated 25/07/2024, addressed to the ld. CIT(A)-52, Mumbai, the assessee has explained the breakup of the capital gains of Rs. 1,83,60,885/- which includes capital gains on sale of 5,68,300 shares of RPCL amounting to Rs. 16,56,000/-. 16. The assessee raised an additional ground of appeal in AY 1992-93, which reads as under:- "Additional ground of appeal 1. The ld. CIT(A) ought to have assessed following income under various heads derived by the assessee based on actual transactions duly reflected in the books of accounts. a. Business loss....