TMI Blog2014 (4) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... gment – Held that:- The decision in CIT Versus M/s Woodward Governor India P. Ltd. & M/s Honda Siel Power Products Ltd. 2009 (4) TMI 4 - SUPREME COURT] followed - loss suffered as on the date of balance sheet is an item of expenditure u/s 37(1) of the Act - No adverse findings have been given by the AO so far as the method of accounting employed by the assessee is concerned - There is also no finding of the AO that the assessee is not following the method of accounting employed during the year under consideration consistently - the AO is directed to allow the loss – Decided in favour of Assessee. - I.T.A. No.1060/Mum/2011, I.T.A. No.9086/Mum/2010 - - - Dated:- 28-2-2014 - Shri D. Manmohan, VP And Shri N. K. Billaiya, AM,JJ. For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he loss of Rs. 6,23,421/- in respect of Open Positions in the Future and Options segment. 6. During the course of the scrutiny assessment proceedings, the AO noticed that the assessee while preparing its books of account has taken the stock position at cost or market price whichever is lower thereby making loss of Rs. 8,29,536/-. The AO was of the opinion that in respect of forward contracts, the loss actually materializes on the date when the contract is squared off. In between, it only remains a notional profit or a notional loss which varies on a day today basis. Drawing support from the decision of the Madras High Court in the case of CIT Vs Indian Overseas Bank 151 ITR 446 and Bombay High Court in the case of CIT Vs Kamani Metal Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Vs CIT 246 ITR 206, ITAT Mumbai Bench in the case of Enam Financial Consultants (P) Ltd 6 SOT 312. The Ld. DR also relied upon the clarification issued by the CBDT vide Instruction No. 03/2010 dt. 23.3.2010. 10. We have heard the rival submissions and carefully perused the orders of the lower authorities. A perusal of the assessment record shows that the assessee had Open Position in respect of the following scrips:- 11. The assessee has taken the stock position as on 31.3.2005 at cost or market price whichever is lower and accordingly the loss was booked. The loss for the year under consideration was computed at Rs. 6,23,421/-. The claim of such loss has to be considered in the light of Sec.37(1) of the Act. The word expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystem adopted by the assessee is fair and reasonable or is adopted only with a view to reduce the incidence of taxation. 12. A perusal of the assessment record shows that no adverse findings have been given by the AO so far as the method of accounting employed by the assessee is concerned. There is also no finding of the AO that the assessee is not following the method of accounting employed during the year under consideration consistently. It is also not the case of the Revenue that while booking the loss, the assessee has not followed accepted accounting standards. It is also not the case of the Revenue that the conduct of the assessee is only in a view to reduce the incidence of the taxation. On the contrary, we find that the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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