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2018 (7) TMI 1563

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..... empted to point out why the above test is not correct. Disallowance of foreign exchange loss - Held that:- Issue stands concluded against the revenue and in favour of the respondent-assessee by the decision of the Supreme Court in the case of CIT vs. Woodward Governor India Pvt Ltd [2009 (4) TMI 4 - SUPREME COURT ] Disallowance of Vanda Loss - whether the said loss is speculative in nature as per section 73? - Held that:- We find that both the CIT(A) as well as Tribunal have come to a concurrent finding of fact that, the loss on account of Vanda incurred by the respondent-assessee is not on account of carrying out transactions on its own account, but is an incident of its business as share broker. Thus, the activity which has resulted .....

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..... fees as revenue expenditure, without appreciating the fact that the said expenses are capital in nature? (2) Whether on the facts and in, the circumstances of the case and in law, the Tribunal was justified in deleting the disallowance of foreign exchange loss based on the decision of the Hon'ble Supreme Court in CIT Vs. Woodward Governor India Pvt. Ltd. 312 ITR 254 which deals with loss arising on account of foreign exchange loan taken for the purpose of working capital whereas, in the present case the foreign exchange loss pertains to diminution in the value of foreign currency held as an asset by the assessee? (3) Whether on the facts and in, the circumstances of the case in law, the Tribunal was justified in holding that .....

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..... (a) Customers Rights, (b) Fixed Assets, (c) Goodwill and (d) Noncompete fee. The respondent treated noncompete fee as revenue expenditure. The Assessing Officer in the Assessment Order dated 31st December, 2003 did not allow the same as revenue expenditure, holding that, the payment made to the three companies as noncompeting fee were in the nature of capital expenditure. (ii) Being aggrieved by order dated 31st December, 2009, the Respondent Assessee filed an appeal to the Commissioner of Income tax (Appeals) [CIT(A)]. By an order dated 29th November, 2010 the CIT(A) upheld the view of the Assessing Officer. (iii) Being aggrieved with the order dated 29th November, 2010 of the CIT(A), the Respondent-assessee filed a furth .....

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..... rned Counsel for the Appellant states that issue stands concluded against the revenue and in favour of the respondent-assessee by the decision of the Supreme Court in the case of CIT vs. Woodward Governor India Pvt Ltd 312 ITR 254. (ii) In the above view, this question does not give rise to any substantial question of law. Thus, not entertained. 5. Re.Question (4) : (i) The Respondent-assessee carries on the business of stock broking and trading in shares securities. For the subject assessment year, the respondent claimed an amount of ₹ 1.95 Crores as Vanda loss. This Vanda loss was claimed to be incurred in carrying out its business as share broker. It is the case of Respondent-assessee that the Vanda loss is term used in th .....

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..... broker. Thus, allowed the appeal. (iii) Being aggrieved, Revenue preferred an appeal before the Tribunal. The impugned order of the Tribunal confirms the finding of fact recorded by the CIT(A) that these transactions are carried out by the respondent not on his own account but in the course of his business as a broker. On the aforesaid facts, the Tribunal held that Explanation to Section 73 of the Act, wouldnot be applicable where the purchase and sale of shares is on account of Vanda loss. This is so, as on facts, it found that this loss is not incurred on transactions undertaken by the assessee as an independent dealer/investor in the nature of trade or as its own investment. (iv) We find that both the CIT(A) as well as Tribunal hav .....

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