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2012 (9) TMI 430 - AT - Income TaxDisallowance on account of loss of derivatives Assessee incurred loss on derivative transactions - Notification issued by the Central Govt. u/s 43(5) read with Rule 6 DDA, and 6 DDB, on 25.1.2006 - Treated derivative transaction as speculative loss Held that:- CIT(A) examined that assessee did not incur net loss during this period. Prior to the notification, assessee received net gain from transactions in F&O. AO has no basis for arriving at a derivative trading loss. Therefore appeal decide in favour of assessee Addition on account of unexplained cash credit u/s 68 Held that:- Department representative has not pointed out any factual error in the findings of CIT(A). The assessee has filed all these evidence before the AO. The AO in his order has in a very casual manner, without giving any reasons as to why the evidence furnished by the assessee was not acceptable, made the addition. Therefore, ITAT do not find any reason as to why the issue is to be set aside to the file of the AO. Appeal decides in favour of assessee Disallowance of interest expense - The bank granted overdraft facilities for business purposes AO made addition on basis that assessee has surplus funds in the form of undistributed profits of the earlier year Addition made on presumption that the surplus funds have to be held as used for giving money to directors/sister concerns - Held that:- where the assessee has own funds as well as borrowed funds and it advanced funds to the sister concern for allegedly non business purposes, then a presumption can be made that the advances for non-business purposes have been made out of own funds following the decision Reliance Utilities Limited (2009 (1) TMI 4). Appeal decides in favour of assessee.
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