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2014 (5) TMI 359 - HC - Income TaxDisallowance of loss in MCX division – Held that:- Following Commissioner of Income-tax- III Versus Jay Enterprise[2012 (6) TMI 545 - GUJARAT HIGH COURT] - the AO did not deny the fact that the assessee is a bullion merchant and has a terminal of MCX as a member - the loss arose on account of dealing in commodities ordinarily dealt in by the assessee in its business - CIT(A) was of the view that the transactions were of an integrated nature and were entered into to guard against future losses and came within the exception to Section 43(5) of the Act – the CIT(A) was justified in holding that the loss could not be said to be a speculation loss – Decided against Revenue. Deletion of interest on unsecured loan – Held that:- The Tribunal confirmed the view of CIT (A) as in the case of assessee for the year 2006-07 - it had upheld the view of the CIT (A) by deleting the addition made on account of interest on unsecured loan - Revenue is unable to point out as to whether such issue was carried to the High Court in the earlier year - the total amount diverted from the Head Office to the MCX Division under the head of unsecured loan was to the very Division of the assessee, and was for the purpose of business transaction and the said fund was not advanced to any parties for non-interest bearing activities - the amount was diverted to its own business division and in absence of any diversion outside for activities not bearing interest – the addition could not have been confirmed – Decided against Revenue. Deletion of penalty expenses – Shortage of sum - Held that:- The Tribunal on the ground that the nature of penalty was not explained by the AO held that the penalty was on the business transaction and not for violation of statute concurring with CIT(A) - The issue also does not require any consideration only on the smallness of assessment – Decided against Revenue.
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