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2015 (11) TMI 1538 - AT - Income TaxAddition u/s. 14A - CIT(A) restricted the addition - Held that:- We find that the relevant assessment year involved is 2007-08 and as held by Hon’ble Bombay High court in the case of Godrej & Boycee Mfg. Co. Ltd., [2010 (8) TMI 77 - BOMBAY HIGH COURT ] that Rule 8D of the Rules as inserted by the I. T (Fifth Amendment) Rules, 2008 w.e.f. 24.3.2008 is prospective and not retrospective. We find that the exempted income of dividend is to the extent of ₹ 37,34,300/- and long term capital gain of ₹ 5,62,20,229/- in AY 2007-08. Rule 8D of the Rules is not applicable in this assessment year in the assessee’s case as held by Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. (Supra) being prospective. We are of the view that the CIT(A) has rightly restricted the disallowance at 1% of the exempted income and we confirm the same. - Decided against revenue Disallowance on account of donation - Held that:- We find that the AO has disallowed the claim of donation on the basis that no evidence was produced by the assessee during the assessment proceedings but CIT(A) directed the AO to allow the claim of the assessee after verification of copies of receipts and declaration issued by approved charities and as produced by assessee before him.We find that the CIT(A) has directed the AO to examine the receipts for the donations mentioned above. He has not decided the issue. However, we feel that this issue can be verified by the AO and accordingly, this issue of revenue’s appeal is set aside and allowed for statistical purposes. Rebate u/s. 88E of the Act on the computed book profit u/s. 115JB - Held that:- This issue is not arising out of the order of CIT(A), hence, this issue cannot be adjudicated and this ground cannot be raised by revenue. On query from the Bench, Ld. Sr. DR fairly conceded that no such ground was raised before CIT(A) by the assessee and hence, he concedes that this issue cannot be raised before Tribunal for the first time. Accordingly, this ground of appeal of revenue is dismissed being infructuous. Disallowance of loss in business of purchase and sale of shares to be assessed as deemed speculation loss - applicability of Explanation to sec. 73 - Held that:- Where an assessee, being the company, besides dealing in other things also deals in purchase and sale of shares of other companies, the assessee shall be deemed to be carrying on a speculation business. The assessee, in the present case, principally is a share broker, as already indicated. The assessee is also in the business of buying and selling of shares for self where actual delivery is taken and given and also in buying and selling of shares where actual delivery was not intended to be taken or given. Therefore, the entire transaction carried out by the assessee, indicated above, was within the umbrella of speculative transaction. There was, as such, no bar in setting off the loss arising out of derivatives from the income arising out of buying and selling of shares. In view of the above facts and circumstances and the proposition of law as discussed above, we are of the view that assessee has a loss which is arising out of business and accordingly, the same is a business loss and not speculation loss as held by lower authorities. - Decided in favour of assessee
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