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2016 (8) TMI 258 - AT - Income TaxTreating the loss as Speculation Loss under Explanation to Section 73 - Held that:- The loss incurred by the assessee company on share trading carried on by it on its own behalf shall not be hit by the deeming fiction of explanation to Section 73 of the Act and shall be treated as normal business loss to be set aside against the other non- speculative business income and other income as per provisions of the Act. This disposes of the ground no 1 raised by the assessee company as well additional ground raised by the assessee company. Disallowance u/s 14A - Held that:- Even strategic investment in group concerns for the purpose of control and not for earning dividend attract disallowance u/s 14A of the Act read with rule 8D of the Income Tax Rules, 1962., we hold that the investment made by the assessee company in Bombay Stock Exchange shall attract disallowance u/s 14A of the Act having regards to the accounts of the assessee company as provided u/s 14A(2) of the Act keeping in view Rule 8D(2)(iii) of the Income Tax Rules, 1962.We are therefore inclined to set aside the matter to the file of the AO for de-novo determination and quantification of disallowance u/s 14A of the Act of the indirect expenses incurred by the assessee company in relation to such income which does not form part of the total income having regards to the accounts of the assessee company as provided u/s 14A(2) of the Act and also keeping in view Rule 8D(2)(iii) of Income Tax Rules, 1962. n the case of Cheminvest Limited (2015 (9) TMI 238 - DELHI HIGH COURT ) while in the said case the Hon’ble Delhi High Court has laid down that there can be no disallowance u/s 14A of the Act if there is no exempt income received or receivable by the tax-payer. In the instant appeal, the assessee company did received the exempt income vide dividend income from shares of ₹ 2,81,541/- . This disposes off ground no 2 of the assessee company.
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