The ITO, Ward-5(4), Surat V. M/s. Siddh Enterprises, Surat

ITA 1470/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6037 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 28-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H P MEENA
• Assessee Lawyers: KK SHAH
• Keywords: Business income
• Section: 14A; 133(6); 251

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AT SURAT CAMP. BEFORE S/SHRI T. K. SHARMA, JM AND D.C.AGRAWAL, AM INCOME-TAX OFFICER, WARD 5(4), ROOM NO.316, 3 RD FLOOR, AAYKAR BHAVAN, MAJURA GATE, SURAT. V/S . M/S SIDDH ENTERPRISES, 1 ST FLOOR, AMBER PALACE, TIMALIAWAD, NANPURA, SURAT. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI H. P. MEENA, SR. D.R. RESPONDENT BY:- SHRI K. K. SHAH, AR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THE APPEAL HAS BEEN FILED BY THE REVENUE AND THE C O BY THE ASSESSEE IN RESPECT OF ORDER OF LD. CIT(A) DATED 1 8.2.2008 FOR ASST. YEAR 2005-06. THE REVENUE IN ITS APPEAL HAS RAISED FOLLO WING GROUNDS:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A)-III, SURAT HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER INCOME EARNED ON THE PROFIT ON SHARE TRANSACTIONS AMOUNTING TO RS.14,65,747/- A S BUSINESS INCOME INSTEAD OF INCOME FROM OTHER SOURCE S ASSESSED BY THE ASSESSING OFFICER. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. C1T(A)-III, SURAT HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLO WANCES ITA NO.1470/AHD/2008 ALONG WITH CO NO.112/AHD/2008 ASST. YEAR :2005-06 2 OF PROPORTIONATE EXPENSE U/S, 14A OF THE IT ACT AM OUNTING TO RS.1,05,806/- [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT(A), SURAT HAS ERRED IN RESTRICTING THE DEDUCTION OF EXEMPTED DIVIDEND INCOME AT RS.6,70,944/- INSTEA D OF RS.8,48,284/- CLAIMED BY THE ASSESSEE. WHEREAS THE CROSS OBJECTION RAISED BY THE ASSESSEE IS AS UNDER :- (1) THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING ADDITION OF RS.3,40,518/- ON ACCOUNT OF SALE OF SHARES THROUGH SUSHIL FINANCE CONSULTANT LTD. AS UNDISCLOSED RECEIPT OF T HE FIRM. 2. THE FACTS OF THE CASE ARE THAT ASSESSEE FIRM IS DEALING IN TRADING IN SHARES AND SECURITIES. IT DECLARED GROSS INCOME OF RS.81,25,568/-, ADJUSTING BROUGHT FORWARD LOSS AND ACCORDINGLY DECL ARED NIL INCOME. THE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT CLAIM OF LOSS OF RS.81,25,568/- WAS NOT PROPER. THE AO IS SUED NOTICE UNDER SECTION 133(6) TO THE NATIONAL STOCK EXCHANGE (NSE ) AND BOMBAY STOCK EXCHANGE (BSE). HE FOUND THAT THE SHARE TRANSACTION S CARRIED OUT BY THE ASSESSEE THROUGH SUB-BROKER M/S CHIRAG SHARES & STO CK BROKING (P) LTD. WERE NOT CARRIED OUT AT THE BSE IN THE NAME AND CLI ENT CODE OF THE ASSESSEE. IN ADDITION TO THIS AO NOTICED THAT SALE OF SHARES MADE BY THE ASSESSEE THROUGH ITS OWN CLIENT CODE AND THROUGH ST OCK BROKER M/S SUSHIL FINANCE CONSULTANTS LTD. WERE NOT RECORDED IN THE B OOKS OF ACCOUNT OF THE ASSESSEE. IN RESPONSE TO SHOW CAUSE NOTICE IT WAS E XPLAINED THAT SHARE TRANSACTIONS WERE CARRIED OUT THROUGH RECOGNIZED ME MBERS OF THE STOCK EXCHANGE. M/S CHIRAG SHARE BROKERS THROUGH WHOM CER TAIN TRANSACTIONS WERE CARRIED OUT WERE WORKING AS SUB-BROKER OF M/S SUSHIL FINANCE CONSULTANTS LTD. IT WAS EXPLAINED THAT SOME TRANSAC TIONS WERE CARRIED OUT THROUGH MAIN BROKER I.E. M/S SUSHIL FINANCE CONSULT ANTS LTD. AND SOME 3 OTHER TRANSACTIONS WERE CARRIED OUT THROUGH SUB-BRO KER NAMELY M/S CHIRAG SHARE BROKERS. THE DEALING IN SHARES WAS SUP PORTED BY CONTRACT BILLS AND FURTHER SUPPORTED BY CONTRACT NOTE OF THE MAIN BROKER AND PAYMENTS AND RECEIPTS WERE MADE THROUGH ACCOUNT PAY EE CHEQUES AND, THEREFORE, PROFIT AND LOSS ARISING ON SALE OR PURCH ASE OF SHARES SHOULD BE ASSESSED UNDER THE HEAD BUSINESS INCOME. THE AO N OTED THAT SALE OF THE FOLLOWING SHARES CARRIED OUT THROUGH M/S SUSHIL FIN ANCE CONSTANTS LTD. WITH CODE NO.636 AT B.S.E. WERE NOT RECORDED IN THE BOOKS OF THE ASSESSEE:- SL.NO. DATE NAME OF THE SCRIP QUANTITY RATE VALUE TOTAL 1. 8.6.2004 CMC LTD. 200 603 120600 120600 2. 8.6.2004 DATA M.TECH 49 133 6517 8.6.2004 251 133 33383 39900 3. 8.6.2004 NDTV 400 86.8 34720 34720 4. 8.6.2004 PATNI COMP. 25 307.5 7687.5 8.6.2004 125 307.5 38437.5 8.6.2004 100 320.85 32085 8.6.2004 50 320.7 16035 94245 5. 8.6.2004 PETRONET LNG 2000 22.4 44800 44800 6. 8.6.2004 NTPC 72 86.85 6253.20 6253.20 TOTAL 340518.20 AS THE AO FOUND THAT ABOVE SALE CONSIDERATION OF RS .3,45,518 SOLD AT BSE THROUGH M/S SUSHIL FINANCE CONSULTANTS LTD. WAS NOT RECORDED IN THE BOOKS OF THE ASSESSEE HE TREATED THE RECEIPT OF SAL E OF SHARES OF THE SALE 4 VALUE OF RS.3,45,518/- AS UNDISCLOSED RECEIPT AND M ADE THE ADDITION THEREOF TO THE TOTAL INCOME. 3. IN ADDITION TO ABOVE, THE AO NOTED THAT ASSESSEE HAD SHOWN INCOME OF RS.14,65,747/- BEING PROFIT ON SHARE TRANSACTION S CARRIED OUT THROUGH M/S CHIRAG SHARE & STOCK BROKING (P) LTD. AS IT WAS NOT REAL INCOME FROM SHARE TRANSACTIONS AS THEY WERE NOT CARRIED OU T THROUGH STOCK EXCHANGE OR UNDER ASSESSEES OWN CODE NO.; HE TREAT ED IT AS INCOME FROM OTHER SOURCES AFTER REJECTING THE EXPLANATION OF TH E ASSESSEE FOR THE FOLLOWING REASONS :- (I) IN RESPECT OF THESE TRANSACTIONS, NO CONTRACT N OTE WAS ISSUED BY THE STOCK BROKER, M/S. SUSHIL FINANCE CONSULTANTS LTD., IN THE NAME OF THE ASSESSEE. THE CONTRACT NOTE WAS ISSUED BY THE S TOCK BROKER IN THE NAME AND CLIENT CODE OF M/S, CHIRAG SHARE & STO CK BROKING PVT. LTD. (CLIENT CODE NO,CS4001), THEREFORE, THE S TATEMENT MADE BY THE ASSESSEE THAT THE CONTRACT NOTE WAS ISSUED B Y THE STOCK BROKER IN THE CLIENT CODE AND NAME OF THE ASSESSEE IN RESPECT OF THESE TRANSACTIONS, IS INCORRECT. (II) NONE OF THESE SHARE TRANSACTIONS WERE CARRIED OUT BY THE STOCK BROKER, M/S. SUSHIL FINANCE CONSULTANTS LTD. AT B.S .E. IN THE NAME AND CLIENT CODE OF THE ASSESSEE. THE TRANSACTIONS W ERE CARRIED OUT BY THE STOCK BROKER IN THE NAME AND CLIENT CODE OF M/S. CHIRAG SHARE & STOCK BROKING PVT. LTD. THEREFORE, FROM NO STRETCH OF IMAGINATION IT CAN BE SAID THAT THESE SHARE TRANSAC TIONS WERE IN ANY WAY CONNECTED WITH THE ASSESSEE. THEREFORE, THE STATEMENT OF THE ASSESSEE THAT THESE SHARE TRANSACTIONS WERE SUP PORTED BY THE CONTRACT NOTE OF THE MAIN BROKER IS INCORRECT. (III) THE CONTENTION OF THE ASSESSEE THAT PURCHASE AND SALE OF THE SHARES WERE MADE THROUGH ACCOUNT PAYEE CHEQUE IS ALSO NOT CORRECT. FROM THE COPY OF ACCOUNT OF M/S. CHIRAG SHARE & STOCK BR OKING PVT. LTD., IT IS SEEN THAT NEVER THE ASSESSEE PAID OR RE CEIVED THE CHEQUE ON THE DAY OF 'PAY-IN' OR 'PAY-OUT' IN RESPECT OF S HARES CLAIMED TO HAVE BEEN PURCHASED AND SOLD THROUGH M/S. CHIRAG SH ARE & STOCK BROKING PVT, LTD. AS PER THE GUIDELINES OF THE SEBI , PAYMENT HAS TO 5 BE RECEIVED AND MADE ON THE PAY-IN AND PAYS-OUT TO/ BY THE STOCK BROKER IN RESPECT OF THE SHARES PURCHASED AND SOLD. (IV) THE ASSESSEE AS WELL AS THE SUB-BROKER, M/ S. CHIRAG SHARE & STOCK BROKING PVT. LTD., WAS FULLY AWARE THAT SHARE TRANS ACTIONS ARE TO BE CARRIED OUT IN THE NAME AND CLIENT CODE OF THE PERS ON ON WHOSE BEHALF THE TRANSACTIONS ARE CLAIMED TO HAVE BEEN CA RRIED OUT, THIS IS CLEAR FROM THE FACT THAT THE ASSESSEE ITSELF HAS CARRIED OUT TRANSACTIONS IN ITS OWN NAME AND CLIENT CODE AT THR OUGH SAME SUB- BROKERS, M/S. CHIRAG SHARE & STOCK BROKING PVT. LT D, THEREFORE, IT CANNOT BE ACCEPTED THAT IT WAS AN IGNORANCE ON THE PART OF THE ASSESSEE OR THE SUB-BROKER BECAUSE OF WHICH THE TRA NSACTIONS CLAIMED TO HAVE BEEN CARRIED OUT AT B S,E, THROUGH M/S. CHIRAG SHARE & STOCK BROKING PVT, LTD. WERE NOT CARRIED OU T IN THE NAME AND CLIENT CODE OF THE ASSESSEE, (V) THE SHARE TRANSACTIONS CLAIMED TO HAVE BEEN C ARRIED OUT BY THE ASSESSEE THROUGH M/S. CHIRAG SHARE & STOCK BROKING PVT, LTD. WERE NEITHER 'SPOT DELIVERY' TRANSACTIONS AS DEFINE D IN CLAUSE (I) OF SECTION-2 OF_ SECURITIES CONTRACTS REGULATION ACT, 1956 BECAUSE IN RESPECT OF 'SPOT DELIVERY CONTRACT' THE PAYMENT OF PRICE HAS TO BE MADE EITHER ON THE SAME DAY AS THE DATE OF CONTRACT OR ON THE NEXT DAY WHEREAS IN THE CASE OF THE ASSESSEE NO PAYMENT WAS MADE EITHER ON THE DAY OF TRANSACTIONS OR THE NEXT DAY O F THE TRANSACTIONS. FURTHER ASSESSEE HAD CLAIMED DIVIDEND INCOME OF RS. 8,48,284 AS EXEMPT UNDER SECTION 10(34). IT WAS CLAIMED BEFORE THE AO THAT ASSESSEE HAD NOT INCURRED ANY EXPENDITURE IN EARNING THIS DIVIDEND I NCOME BUT THE AO DISALLOWED THE PROPORTIONATE EXPENDITURE OF RS.1,05 ,806/- AS ATTRIBUTABLE TO EARNING DIVIDEND INCOME BY ADOPTING FOLLOWING CA LCULATION:- RS.11,55,715 RS.92,65,808 X RS.8,48,284) I.E. RS.1,05,806/-. (RS.11,55,715 ARE TOTAL EXPENSES AGAINST INCOME OF RS.92,65,808/- WHEREAS DIVIDEND INCOME INCLUDED THEREIN IS RS.8,48 ,284/-) 4. THE AO, IN RESPECT OF UNPROVED CLAIM OF DIVIDEND , DISALLOWED RS.74,312 AND RS.1,03,028/- TOTALING TO RS.1,77,340 /- OUT OF TOTAL CLAIM OF 6 RS.8,48,284/-. THE LD. AO HELD THAT NO PROOF IN RES PECT OF DIVIDEND CLAIM HAS BEEN SUBMITTED IN RESPECT OF SHARE TRANSACTIONS CARRIED OUT THROUGH M/S CHIRAG SHARE & STOCK BROKING (P) LTD., EXCEPT E NTRIES IN THE ACCOUNTS OF THE ASSESSEE. AS AO HAD EARLIER HELD TH AT TRANSACTIONS THROUGH THAT SUB-BROKER ARE NOT SHARE TRANSACTIONS THEN CLA IM OF DIVIDEND THERE- FROM WOULD ALSO NOT BE ACCEPTABLE. 5. IN APPEAL LD. CIT(A) CONFIRMED THE ADDITION OF R S.3,41,518/- BEING TRANSACTIONS THROUGH M/S SUSHIL FINANCE CONSTANT LT D. BUT NOT RECORDED IN THE BOOKS OF THE ASSESSEE. IN THIS REGARD WE REPROD UCE THE OBSERVATIONS OF LD. CIT(A) AS UNDER :- DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AP PELLANT FILED AN ADDITIONAL GROUND OF APPEAL REGARDING ADDITION OF RS.3,40,518/- ON AC COUNT OF SALE OF SHARES THROUGH M/S SUSHIL FINANCE CONSULTANTS LTD. IT WAS SUBMITTE D THAT THIS GROUND WAS OMITTED FROM BEING MENTIONED DUE TO AN OVERSIGHT. I AM OF T HE VIEW THAT THE OMISSION WAS NOT INTENTIONAL AND THEREFORE ADMIT THE FRESH GROUND. T HE AO OBSERVED THAT THIS AMOUNT WAS THE SALE PROCEEDS OF SIX DIFFERENT SCRIPS SOLD THROUGH THE STOCK BROKER THROUGH THE APPELLANTS OWN CLIENT CODE BUT THE SAME WAS NOT RE CORDED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. THIS WAS THEREFORE TREATED AS UNDISC LOSED RECEIPTS AND ADDITION WAS MADE ON THIS ACCOUNT. IN THIS CONTEXT THE LD. AR SUBMITTED THAT REGARDING ADDITION OF RS.3,40,518/- ON ACCOUNT OF SALE OF SHARES THROUGH SUSHIL FINANCE CO NSTANTS LTD. ON ACCOUNT OF DETAILS SUPPLIED BY THE STOCK EXCHANGE, THERE WAS ENGLISH S TYLE OF DATE WHEREIN FIRST FIGURE WAS OF MONTH, SECOND FIGURE WAS OF DATE AND THE THI RD FIGURE. SINCE THE VERIFICATION WAS WRONGLY DONE SAY IN 08.06.2004 INSTEAD OF 06.08 .2004 AND THEREFORE, TRANSACTION AS PER THE STOCK EXCHANGE DID NOT TALLY. ON VERIFIC ATION, IT WAS FOUND THAT ALL TRANSACTIONS WERE DULY ACCOUNTED PARTLY IN THE CASE OF FIRM AND PARTLY IN THE NAME OF PARTNERS/RELATIVE. SINCE THE TRANSACTION WAS PUT FO R THE TOTAL QUANTITY IN ONE CODE, THE ENTIRE SALE AS PER THE STOCK EXCHANGE WAS IN THE NA ME OF FIRM. HOWEVER, THE BROKER USED TO GIVE CONTRACT ACCORDING TO THE OWNERSHIP OF SHARES. ALL TRANSACTIONS WERE CARRIED ON LINE BY THE BROKERS/SUB-BROKERS AND THER E WAS NO MANUAL TRANSACTION AND THEREFORE NO UNACCOUNTED SALES. I HAVE CONSIDERED THE SUBMISSIONS BUT I AM NOT INCL INED TO AGREE WITH THE APPELLANT ON THIS ACCOUNT. IT APPEARS THAT THE FIGURES OF MONTHS , DATES AND YEARS IS ONLY AN AFTER THOUGHT. THESE TRANSACTIONS ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT BUT APPEAR IN THE BOOKS OF THE SAID BROKER. THESE T RANSACTIONS ARE CLEARLY IN THE NATURE OF TRANSACTIONS OUT OF BOOKS OF ACCOUNTS AND THEREFORE ADDITION MADE BY THE AO IS IN ORDER AND IS HEREBY CONFIRMED. 7 6. IN RESPECT OF ADDITION OF RS.14,65,747/- LD. CIT (A) HELD THAT THE TRANSACTIONS RELATING TO EARNING OF PROFIT OF RS.14 ,65,747/- WERE GENUINE AND CANNOT BE TERMED AS INCOME FROM OTHER SOURCES A ND HAS TO BE TAKEN UNDER THE HEAD BUSINESS INCOME FOR THE REASONS THAT - (I) ASSESSEE IS A REGULAR DEALER IN SHARES AND SECURITIES AND EACH EN TRY/TRANSACTION MADE THROUGH SUB-BROKER M/S CHIRAG SHARES & STOCK BROKIN G (P) LTD., APPEAR IN THE BOOKS OF THE ASSESSEE AS WELL AS IN THE BOOK S OF M/S SUSHIL FINANCE CONSULTANTS LTD.; (II) CONTRACT NOTES ARE ISSUED IN THE NAME OF SUB-BROKER. (III) THE PAYMENTS IN RESPECT OF THESE TRANSACTIONS WERE MADE BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES. THERE IS N O REASON TO SUSPECT THE GENUINENESS OF THE TRANSACTIONS; (IV) THE PAYME NTS AND RECEIPTS ARE MADE BY PAY-IN AND PAY-OUT BASIS IN THE CASE OF F& O TRANSACTIONS; (V) SALE AND PURCHASE OF SHARES WAS THROUGH DELIVERY; ( VI) IN THE CASE OF INCOME FROM BUSINESS, IT IS NOT MATERIAL WHETHER TH E TRANSACTIONS ARE DONE THROUGH THE SUB-BROKER OR MAIN BROKER. IT MAY BE VI OLATION OF SEBI NORMS BUT THERE IS NO CONTRAVENTION OF THE INCOME-T AX ACT; AND (VII) THE TRANSACTIONS ARE DULY RECORDED IN THE BOOKS OF BOTH THE PARTIES. 7. IN RESPECT OF ADDITION OF RS.1,05,806/- BEING ES TIMATED EXPENDITURE RELATING TO DIVIDEND INCOME, LD. CIT(A) HELD THAT P ROVISIONS OF SECTION 14A WOULD BE APPLICABLE WHEN EXPENDITURES ARE ACTUA LLY INCURRED FOR EARNING TAX FREE INCOME AND CANNOT BE MADE BY ATTR IBUTING TO CERTAIN EXPENDITURE TO SUCH EXEMPTED INCOME. IN RESPECT OF DISALLOWANCE OF RS.1,77,340/- BEING DIVIDEND INCOME CLAIMED BY THE ASSESSEE BUT TREATED AS OTHER INCOME, LD. CIT(A) HELD THAT ONCE TRANSACT IONS THROUGH SUB- BROKER WERE HELD TO BE GENUINE BUSINESS INCOME AND THEN THERE IS NO REASON TO DISALLOW THIS INCOME AS DIVIDEND INCOME. 8 8. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. OUR DECISION IN RESPECT OF EACH ISSUE IS AS UNDER :- (I) AMOUNT OF RS.14,65,745/- IN REVENUES APPEAL - WE FIND THAT THE TRANSACTIONS THROUGH SUB-BROKER M/S CHIRAG SHARE & STOCK BROKING (P) LTD. ARE THROUGH PROPER ACCOUNTING ENTRIES; CONTRAC T NOTES ARE ISSUED; THEY ARE FOUND RECORDED IN THE BOOKS OF BOTH THE PARTIES ; TRANSACTIONS ARE THROUGH ACCOUNT PAYEE CHEQUES; THE ASSESSEE HAS ONL Y TREATED THE PROFIT AS INCOME AND WHEREAS THE AO HAS ALSO NOT TREATED THE SALE PROCEEDS AS INCOME BUT ONLY TREATED THE PROFIT AND LOSS AS INCO ME FROM OTHER SOURCES. THUS THERE IS NO DOUBT TO HOLD THAT ASSESSEE HAS NO T CARRIED OUT THE TRANSACTIONS. THE ONLY REASON FOR TREATING THE ABOV E AMOUNT AS INCOME FROM OTHER SOURCE IS THAT THESE TRANSACTIONS ARE NO T ROUTED THROUGH STOCK EXCHANGE. BUT FOR US THIS IS NOT A SUFFICIENT REASO N TO HOLD THAT THIS IS AN INCOME FROM OTHER SOURCE. ONCE ALL THE DETAILS SUCH AS CONTRACT NOTES, BILLS OF THE SHARES IN WHICH TRANSACTIONS ARE CARRI ED OUT, CONFIRMATION FROM SUB-BROKER AS WELL AS BROKER ARE FILED AND NOT DOUB TED, THEN THERE IS NO REASON TO HOLD THAT SUCH TRANSACTIONS HAVE NOT TAKE N PLACE. THUS GROUND NO.1 OF THE REVENUE IS REJECTED. (II) AMOUNT OF RS.1,05,806/- IN REVENUES APPEAL IN OUR CONSIDERED VIEW THE DISALLOWANCE UNDER SECTION 14A CAN BE MADE ON ESTIMATE BASIS IF NO DETAILS OF AMOUNT OF EXPENDITU RE INCURRED ON EARNING SUCH INCOME IS AVAILABLE. THE AO WAS JUSTIFIED IN M AKING SUCH DISALLOWANCE BUT THE ONLY ISSUE IS THE QUANTUM OF D ISALLOWANCE. THE LD. AR HAD SUBMITTED THAT SIMILAR ISSUE IS PENDING BEFO RE THE SPECIAL BENCH. WE, THEREFORE, RESTORE THIS MATTER TO THE FILE OF A O TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO GIVE THE EXACT DETAILS OF EXPEND ITURE INCURRED ON EARNING 9 DIVIDEND WHICH IS EXEMPT AND IN CASE SUCH DETAILS A RE NOT FURNISHED THEN PROPORTIONATE DISALLOWANCE AS MADE BY AO WOULD STAN D CONFIRMED. THIS GROUND OF REVENUE IS ALLOWED BUT FOR STATISTICAL PU RPOSES. (III) AMOUNT OF RS.1,77,340/- - THIS ISSUE IS DECIDED AGAINST THE REVENUE BECAUSE IT ARISES FROM THE ADDITION OF RS.1 4,65,747/- BEING THE TRANSACTIONS CARRIED OUT THROUGH SUB BROKER. SINCE WE HAVE HELD THAT PROFIT OF RS.14,65,747/- IS BUSINESS INCOME THEN ADDITION OF RS.1,77,340/- TREATING IT AS NON-BUSINESS INCOME THOUGH DECLARED BY THE ASSESSEE AS DIVIDEND INCOME AS PART OF TOTAL DIVIDEND INCOME OF RS.8,48,284/- CANNOT BE SUSTAINED. THIS GROUND OF REVENUE IS REJECTED. (IV) ADDITION OF RS.3,40,518/- IN CROSS OBJECTION OF ASS ESSEE - WE HAVE CONSIDERED THE SUBMISSIONS. WE ARE NOT CONVINC ED HOW THESE TRANSACTIONS ARE RECORDED IN THE REGULAR BOOKS OF A SSESSEE WITH VARIATIONS IN DATES AS CLAIMED BY IT. ACCORDINGLY THIS GROUND OF ASSESSEE IS REJECTED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS OF TH E ASSESSEE IS DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 11/6/2010 SD/- SD/- (T. K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 11/6/2010 MAHATA/- 10 COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD