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2014 (4) TMI 395 - AT - Income TaxAllowability of business loss – Loss specifically covered u/s 73 of the Act – business activity of institutional stock broking in shares - Loss has occurred in respect of error trade - Held that:- CIT(A) was of the view that the amount was allowable as business loss to the assessee - Due to dispute with the clients, for the transaction, it does not change the relation of principal and the agent - The assessee for business consideration chooses not to recover the losses - These losses are in the course of business and should be allowed as such u/s 28 of the Act - The AO has not brought any material on record to suggest that the contentions of the assessee are either false or incorrect - No material has also been brought on record that these losses are on account of assessee’s own trading in shares - If it is so, the loss accrued to the assessee will be governed by the aforementioned decisions of Tribunal where consistent view has been taken that loss occurred to share broker on account of client disowning transaction is business loss and not speculative loss - the CIT(A) did not commit any error in accepting the claim of the assessee – Decided against Revenue. Disallowance u/s 14A of the Act r.w.r. 8D(2)(iii) of the Rules – Held that:- The third component to compute disallowance u/s 14A as described in Rule 8D(2)(iii) is an amount equal to ½ % of the average of the value of investment, income from which does not or was not form part of the total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year - the third component which to be is taken into consideration while calculating the disallowance is prescribed in the Rules - In absence of concrete material made available by the assessee to show that such component was not warranted, the case of the assessee cannot be accepted - no concrete material has been brought on record by the assessee to come out of the component described in Rule 8D(2) (iii) to content that the same was not applicable – thus, there is no reason to interfere in the order of CIT(A) – Decided against Assessee.
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