Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2373 - AT - Income TaxLoss in share business claimed as business loss - treated as speculative loss in terms of Explanation to section 73 by the Revenue - Held that:- From the perusal of the CIT Vs. Darshan Securities (P.) Ltd. [2012 (2) TMI 117 - BOMBAY HIGH COURT] it is evident that Explanation to section 73 cannot be invoked only for the reason that the assessee is engaged in the share trading activity and does not fall within the exceptions laid down therein. Before applying deeming provisions and explanations to the sections, it is essential to refer to substantive provisions of the Act. Thus, we are of the considered view that the case of the assessee is squarely covered by the judgment of Hon'ble Bombay High Court. Accordingly, this ground of appeal of the assessee is accepted. - Decided in favour of assessee. Accrual of Interest - AO held to be taxable in impugned assessment year whereas the assessee has claimed the same in assessment year 2009-10 and the TDS certificate have also been issued in the assessment year 2009-10 - Held that:- The assessee is following mercantile system of accounting and recognizing the revenue on accrual basis. Since, the interest has accrued to the assessee in the period relevant to assessment year 2008-09, the same has to be taxed in the relevant assessment year. However, we find force in the submissions of the assessee that once income has been offered to tax in assessment year 2009-10 and the tax has been paid thereon the same income should not be taxed twice. The addition of ₹ 3,81,863/- with regard to the interest income received by the assessee in the impugned assessment year is sustained. The Assessing Officer is directed to delete the interest income that has been added in assessment year 2008-09 from the income of assessee in assessment year 2009-10. This ground of appeal of the assessee is partly accepted.- Decided in favour of assessee in part. Interest on borrowed funds allegedly diverted by the assessee for non-business purposes disallowed u/s. 36(1)(iii) - contention of the assessee is that the assessee has diverted borrowed interest bearing funds for non-business purposes - Held that:- Although, the ld. AR has argued that the assessee has sufficient own funds but at the same time has also conceded that proportionate disallowance can be made by considering the availability of own funds. We remit, this issue back to the file of the Assessing Officer to decide this ground afresh after taking into consideration the availability of own funds and the use of same for advancing loans for non-business purposes.- Decided in favour of assessee by way of remand. Commission paid to M/s. Eagle King Investments Development Ltd., Singapore disallowed - no TDS was deducted thereon - Held that:- It is a well settled law that if the payment made is commission simpliciter, for the services rendered abroad to an overseas concern having no PE in India, such payment is not taxable. Since, the income accrued to the overseas non-resident concern is not taxable, there is no question of deduction of tax at source on the said payments. Our view is supported by the judgment of the Hon'ble Madras High Court in the case of CIT Vs. Faizan Shoes Pvt. Ltd. reported as (2014 (8) TMI 170 - MADRAS HIGH COURT). We remit this issue back to the Assessing Officer for re-examination. In case the assessee is able to show that the payments were made through proper banking channel for the services rendered abroad, the payments were in the nature of commission and the overseas concern has no PE in India, the Assessing Officer shall allow the same. - Decided in favour of assessee for the statistical purpose. Disallowance made u/s. 14A r.w. Rule 8D on shares held as stock-in-trade - Held that:- It is an undisputed fact that the shares are held by the assessee as stock-in-trade. The assessee has earned dividend income on such shares. The assessee has not held the shares for earning dividend income. Dividend income is incidental to the share trading business of the assessee. Thus, no disallowance u/s. 14A is warranted on dividend earned on shares held as stock-in-trade. Our view is fortified by the decision of Mumbai Bench of the Tribunal in the case of DCIT Vs. M/s. India Advantage Securities Ltd. [2012 (11) TMI 458 - ITAT, MUMBAI]. Also see CCI Ltd. Versus Joint Commissioner of Income-tax [2012 (4) TMI 282 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
|