Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 728 - ITAT MUMBAIClaim for setting off the loss from 'share trading activity' - Treatment to speculation business loss - Held that:- The Co-ordinate bench after detailed discussion of the issue has finally concluded that that the amendment inserted in Explanation to section 73 of the Act by Finance (No. 2) Act, 2014 w.e.f. 01.04.2015 is clarificatory in nature and would therefore operate retrospectively from 01.04.1977 from which date the Explanation to section 73 was placed on the statute. Accordingly, a company, the principal business of which is the business of trading in shares, would fall under the exception to the explanation to section 73 of the Act. Therefore, the loss incurred in share trading business by such companies, i.e. like the assessee, will not be treated as speculation business loss but normal business loss, and hence the same loss can be adjusted against other business income or income from any other sources of the year under consideration. The AO, therefore, is directed to allow the assessee's claim for setting off the loss from 'share trading activity' and also the expenditure incurred relating to the said share trading activity against the income from ‘business or profession’ for the year under consideration.- Decided in favour of assessee Disallowance u/s 14A - Held that:- The strategic investment in group companies cannot be held to be for investment purposes or with the object of earning of dividend/tax exempt income, but the same, in the light of above referred to Judicial decisions can safely be said to be related to the business activity of the assessee and no disallowance, therefore, is attracted on such an income u/s 14A of the Act. Thus we direct the AO to exclude the strategic investments made by the assessee in group companies while calculating the disallowance under section 14A read with rule 8D of the Income Tax Act. Since the assessee, in the case in hand, has not earned any dividend income in respect of the investments made, hence no disallowance of expenditure u/s 14 A is attracted in relation to the investment portfolio. The disallowance made by the AO in the case of the assessee under section 14A of the Act is hereby ordered to be deleted. - Decided in favour of assessee
|