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2012 (12) TMI 723 - AT - Income TaxAllocation of expenditure between the brokerage business and trading - Speculation Loss – Held that:- Upholding the allocation of expenditure between the two lines of business, only 5% of the expenditure be allocated against the income from trading in shares in the Assessee’s own name (speculation income) and the balance against the brokerage business Income. In this expenses of Kakinada Branch should be excluded. The same ratio will be applicable to depreciation as well. The balance expenditure should be set off against the brokerage income. As Assessee had earned profits in the business of trading in shares in their own name and there is no carried forward speculation losses to be set off. Profit from trading in shares in Assessee’s own name is to be treated as speculative profits - ground of appeal of the Assessee is treated as partly allowed. Trade credit accounts under sec 68 - Held that:- Assessee has to prove the identity of the creditors, genuineness of the transaction and capacity of the creditors. The onus is on the assessee to substantiate it’s claim and the assessee has not discharged the same. Accordingly, in the interest of justice The issue set aside to the file of the AO directing assessee to substantiate its claim - in favour of assessee for statistical purposes. Software expenses - Capital vs. Revenue expense - Held that:- Expenditure incurred for upgradation of software with new regulations of SEBI and not for acquiring any new software - revenue in nature and not Capital as no new asset is created - in favour of assessee.
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