Gujarat High Court
Pr.Commissioner Of Income Tax-4 vs Torrent Pvt.Ltd.....Opponent(S) on 9 June, 2016
Author: Akil Kureshi
Bench: Akil Kureshi, A.J. Shastri
O/TAXAP/794/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 794 of 2015
With
TAX APPEAL NO. 795 of 2015
==========================================================
PR.COMMISSIONER OF INCOME TAX-4....Appellant(s)
Versus
TORRENT PVT.LTD.....Opponent(s)
==========================================================
Appearance:
MR NITIN K MEHTA, ADVOCATE for the Appellant(s) No. 1
==========================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE A.J. SHASTRI
Date : 09/06/2016
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Tax Appeal No.794/2015 involves following three questions:
"(A) Whether the Tribunal is right in law and on fact in upholding the decision of CIT(A) who deleted the disallowance of Rs.4,50,000/ out of total disallowance of Rs.5,00,000/ u/s 14A of the Act made by the Assessing Officer?
(B) Whether the Tribunal is right in law and on fact in not applying the decision of the Madras High Court in case of M/s. Simpson and Co. Ltd. vs. DCIT (Tax Appeal No.2621 of 2006 dtd. 15.10.2012) for AY 200506 and applying the same for AY 200607 in the composite order?Page 1 of 3
HC-NIC Page 1 of 3 Created On Sat Jun 11 02:26:32 IST 2016 O/TAXAP/794/2015 ORDER (C) Whether the order of the Ld. Tribunal is perverse in law and on fact in upholding the order of the CIT(A) who directed the Assessing Officer to accept the gains as short term capital gain and not business income of the assessee as treated by the Assessing Officer?"
2. In Tax Appeal No.795/2015, there is only one question akin to Question(C) above, i.e. whether receipt of shares to be taxed as capital gain or business income?
3. With respect to first two questions, we find that the same pertained to disallowance of expenditure under section 14A of the Income Tax Act for earning tax fee income. The Tribunal has upheld the view of CIT(Appeals) giving cogent reasons and restricted the disallowance made by the Assessing Officer. No question of law arises.
4. Regarding question (C), we notice that the Tribunal considering the materials on record held that the sale of shares cannot be treated as business income. It was noticed that exact frequency of purchase and sales was not brought on record. No borrowed funds were utilised for acquiring shares. The volume of transactions, according to the Tribunal, would not be a decisive factor. We see not reason to interfere. No question of law arises.
5. We have noticed CBDT circular dated 29.2.2016 giving guidelines for deciding such issue.
6. Tax appeals are dismissed.
Page 2 of 3 HC-NIC Page 2 of 3 Created On Sat Jun 11 02:26:32 IST 2016 O/TAXAP/794/2015 ORDER (AKIL KURESHI, J.) (A.J. SHASTRI, J.) raghu Page 3 of 3 HC-NIC Page 3 of 3 Created On Sat Jun 11 02:26:32 IST 2016