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2010 (11) TMI 422 - AT - Income TaxAddition - Carry forward and set off u/s 43(5),73 - Speculation Business - loss on account of trading in shares - Assessee was a company - For AY 03-04, the Assessee showed a profit of Rs.28,37,382 on sale of shares and securities held as stock-in-trade - The same was offered to tax as speculative income after setting off speculation loss of Rs.27,61,505 brought forward from AY 96-97 to 98-99 - The AO treated the income from sale of shares as normal business income and did not allow set off as claimed by the Assessee - an identical issue as arising for consideration in this appeal came up for consideration before the Hon'ble Bombay High Court in the case of CIT vs. Lokmat Newspapers Pvt. Ltd. [2010 -TMI - 75654 - BOMBAY HIGH COURT ] - Decided in favour of assessee. Professional fees - The aforesaid fees were paid for the purpose of taking professional advise as to whether the assessee can enter into the business of real estate. In this regard the A.O. was of the view that the assessee was in the business of trading in shares and not dealing in property. Therefore, the aforesaid expenditure cannot be said to be wholly and exclusively incurred for the purpose of business of the assessee - Decided against of assessee. addition u/s.14A -In the absence of clear bifurcation of expenses for earning dividend income the Assessing Officer has made disallowance on ad hoc basis which appears to be highly excessive in view of the fact that the investments are not made out of the borrowed funds and only the administrative expenses are to be allocated and the efforts put in to achieve the turn over of 20.34 crores in share trading are more than making an investment in the mutual funds which have generated the dividend income - Hence, it will be fair and justified to restrict the disallowance to Rs.1.50 lacs and the appellant gets a relief of Rs.50,000/- Decided in favour of assessee.
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