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2014 (10) TMI 33 - AT - Income TaxGenuineness of trading activity – Set off of speculation loss against the other profits u/s 73 - Held that:- The AO has held that the parties from whom the assessee purchased rice and parties to whom the assessee sold the rice did not exists, both purchases and sales are bogus - the authorities below have not been confronted, the material relied by them for rejecting the claim of the assessee which is not justified - It amounts in violation of principles of natural justice – the AO has power u/s.131 of the Act for enforcing the attendance of the person who could not be produced before the AO on behalf of assessee - the stand of the assessee has been that in spite of written requests during the assessment proceedings, the AO did not furnish the assessee any material of non-service of 6 parties - no adverse inference could be drawn that parties do not exists because the AO has option for calling the attendance of parties under the provisions of section 131 of the Act - The observation of authorities below was premature with regard to their finding of non-existence of the above parties because the transaction of assessee was through banking channel - The details of all parties including telephone, PAN, TIN number were available on record – thus, the order of the CIT(A) is set aside and the matter is to be remitted back to the AO for fresh adjudication – Decided in favour of assessee. Donation made to Political Party – Held that:- The word 'contribute' or its grammatical variation used in the section denotes the amount which a company can legally contribute to a political party or trade union - the Explanation to sec.80GGB was intended to restrict the quantum of such contribution eligible for deduction only to the extent that is admissible u/s 293A of the Companies Act - the contention of the assessee that the explanation provided to the said section which refers to Section 293A of the Companies Act, 1956 was limited to the grammatical meaning of the word used in the body of the section 'Contribute' and in no way defines the admissibility of deduction with reference to quantum of the contribution has no merit – the AO was justified in restricting the admissible deduction u/s.80GGB to the extent of 5% of the average profit of the assessee for the three immediately preceding three years – Decided partly in favour of assessee.
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