Devji Nenshi Palani v. ITO - Taxpublishers.in

Case Laws Analysis
Distinguished CIT v. Gopal Purohit 2010 TaxPub(DT) 1272 (Bom-HC)

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The Tax PublishersITA No. 7881 (Mum.) of 2010 2013 TaxPub(DT) 0539 (Mum-Trib) : (2013) 051 (II) ITCL 0066 : (2013) 055 SOT 0192 INCOME TAX ACT, 1961 --Business expenditureAllowability Motor car expenses--Assessing officer had disallowed motor car expenses on estimate basis towards personal usages as assessee could not produce the log book maintained in respect of such expenses. *Held:* Was justified, as the assessee had not maintained any log book for motor car expenses and, therefore, there was no proof that car had been used for business purpose. Income Tax Act, 1961 Section 37(1) INCOME TAX ACT, 1961 --Business expenditureAllowability Personal use of telephone--Assessing officer had disallowed telephone expenses on estimate basis as assessee had incurred the same for personal use. *Held:* Was justified, as the personal use of telephone was quite common and could not be ruled out. Moreso, in the absence of full details of call records, etc., it was not established that these expenses had been incurred for business purpose. Income Tax Act, 1961 Section 37(1) INCOME TAX ACT, 1961 --Business expenditureAllowability Business promotion, conveyance expenses, etc.--Assessing officer had disallowed business promotion, conveyance, miscellaneous expenses, etc., on estimate basis as there was no proper vouchers which were self-made or generated by assessee. *Held:* Was justified, as the expenditure was not supported by proper bills and vouchers. Moreso, the nature of many of the expenses was such that no proper vouchers were possible but since the expenses were not supported by the proper evidence, the estimated disallowance to a reasonable amount was justified. Income Tax Act, 1961 Section 37(1) INCOME TAX ACT, 1961 --Business incomeChargeability Income from sale and purchase of shares--Assessee had shown short-term capital gain on sale of equity shares. Assessing officer observed that the number of transactions entered by assessee was very large with high frequency and also, noted that assessee while giving the details had himself mentioned 'Speculative short-term capital gain' which clearly indicated the business nature of transactions, therefore, he treated the short-term capital gain declared by assessee as business income. *Held:* Was justified, as the details of share transactions giving the date of purchases and sales had shown that in most of the cases shares had been sold on the very date of purchase that means sales had been made even without taking delivery. Thus, most of the transactions were speculative in nature and the other transactions shares and also been done after a short duration of holding. Moreso, the number of transactions were very large and assessee was almost buying or selling on daily basis, therefore, the pattern of transactions clearly showed that the assessee was trading in shares and was not an investor. SUBSCRIBE FOR FULL CONTENT

The Tax PublishersITA No. 7881 (Mum.) of 2010
2013 TaxPub(DT) 0539 (Mum-Trib) : (2013) 051 (II) ITCL 0066 : (2013) 055 SOT 0192

INCOME TAX ACT, 1961

--Business expenditureAllowability Motor car expenses--Assessing officer had disallowed motor car expenses on estimate basis towards personal usages as assessee could not produce the log book maintained in respect of such expenses. Held: Was justified, as the assessee had not maintained any log book for motor car expenses and, therefore, there was no proof that car had been used for business purpose.

Income Tax Act, 1961 Section 37(1)

INCOME TAX ACT, 1961

--Business expenditureAllowability Personal use of telephone--Assessing officer had disallowed telephone expenses on estimate basis as assessee had incurred the same for personal use. Held: Was justified, as the personal use of telephone was quite common and could not be ruled out. Moreso, in the absence of full details of call records, etc., it was not established that these expenses had been incurred for business purpose.

Income Tax Act, 1961 Section 37(1)

INCOME TAX ACT, 1961

--Business expenditureAllowability Business promotion, conveyance expenses, etc.--Assessing officer had disallowed business promotion, conveyance, miscellaneous expenses, etc., on estimate basis as there was no proper vouchers which were self-made or generated by assessee. Held: Was justified, as the expenditure was not supported by proper bills and vouchers. Moreso, the nature of many of the expenses was such that no proper vouchers were possible but since the expenses were not supported by the proper evidence, the estimated disallowance to a reasonable amount was justified.

Income Tax Act, 1961 Section 37(1)

INCOME TAX ACT, 1961

--Business incomeChargeability Income from sale and purchase of shares--Assessee had shown short-term capital gain on sale of equity shares. Assessing officer observed that the number of transactions entered by assessee was very large with high frequency and also, noted that assessee while giving the details had himself mentioned 'Speculative short-term capital gain' which clearly indicated the business nature of transactions, therefore, he treated the short-term capital gain declared by assessee as business income. Held: Was justified, as the details of share transactions giving the date of purchases and sales had shown that in most of the cases shares had been sold on the very date of purchase that means sales had been made even without taking delivery. Thus, most of the transactions were speculative in nature and the other transactions shares and also been done after a short duration of holding. Moreso, the number of transactions were very large and assessee was almost buying or selling on daily basis, therefore, the pattern of transactions clearly showed that the assessee was trading in shares and was not an investor.