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2010 (12) TMI 1233 - AT - Income TaxLoss incurred on account of share transactions - disallowed in the absence of any evidence - ‘speculation loss and non-speculation loss - The assessee company has stated its business activities as mainly share and stock broking, investment and trading in shares and securities. So far as the addition of ₹ . 58,11,372/- on account of speculation loss is concerned, we find the AO elaborately discussed the reasons for such disallowance which has already been brought out in the facts of the case. So far as the share trading loss of ₹ 60,04,791/ is concerned, we find the reasons given by the AO is that the assessee did not furnish the movement of funds pertaining to the purchase of the shares. According to the AO from whatever details furnished by the assessee, it appears that the scrips in which the assessee incurred loss are the same scrips, which the group has manipulated the prices as found out by the JPC and SEBI report. It is the submission of the ld counsel for the assessee that the shares on which losses have been incurred are not the same scrips as per the report of the JPC and SEBI HELD THAT:- We find before the CIT(A), it was argued that ₹ 58,11,372/- was added in the computation of income in order to arrive at th business income and further addition of ₹ 60,04,791/- was made on the ground that the loss was not genuine. Thus, there is double additions {para 4 of the order of the CIT(A)}. We find this aspect has not been decided by the CIT(A). It is also the case of the AO that the assessee has not explained the differences specifically in those cases where confirmations have not come or where confirmations are incomplete. Under these circumstances, we are of the considered opinion that the matter requires fresh adjudication at the leval of the Or on the basis of the various documents filed before him which appears to have not been properly examined by him. We, therefore, set aside the order of the CIT(A) and restore the matter to the file of the AO with the direction to decide the issue afresh and in accordance with law after giving reasonable opportunity of being heard to the assessee. We hold and direct accordingly. This ground of the assessee is accordingly allowed for statistical purpose. Disallowance on depreciation - membership rights of the Stock Exchange - HELD THAT:- Since this issue was not argued in detail by either of the sides; therefore, in the interest of justice, we deem it proper to restore this issue back to the file of the AO with a direction to decide the issue afresh in the light of the decision of the Hon’ble Supreme Court wherein it has been held that the assessee is entitled to depreciation on stock exchange membership card and in accordance with law. This ground of the assessee is accordingly allowed for statistical purpose. disallowance on account of bad debts - the evidences filed before the CIT(A) as additional evidence submitted that the same should have been admitted by him. He, accordingly, prayed that in the interest of justice the matter should be sent back to the file of the AO for fresh adjudication. HELD THAT:- Considering the totality of the facts and circumstances of the case and in the interest of justice, we are of the considered opinion that the assessee should be given one more opportunity to substantiate its claim of bad debts. We, therefore, set aside the order of the CIT(A) and direct the AO to give one more opportunity to explain the allowability of bad debts of ₹ 1,49,62,136/-. The AO shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground taken by the assessee is accordingly allowed for statistical purpose. Claim for miscellaneous income as business income - HELD THAT:- We are of the opinion that only sundry balance written back on account of provisions u/s 41(1) can be treated as ‘business income’ and the rest of the items like interest, dividend, miscellaneous income, turnover charges collected, commission income, bank charges and de-mat charges etc. has to be treated as ‘income from other sources’. We hold and direct accordingly. This ground of the assessee is accordingly allowed partly.
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