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2016 (10) TMI 983 - AT - Income TaxAddition on speculation loss - Speculation transaction - Held that:- From all the foregoing discussion we find that the AO has treated the transaction of sale & purchase of shares in F&O market which was undertaken to safe guard the loss in his holdings of stocks and shares against price fluctuations as speculation. However we find that the existing transaction is falling within the exceptions provided in clause (c) to section 43(5) of the Act. As per the provisions of the section 43(5) of the Act the transaction is falling within the definition of speculation transaction but the same has been provided in the exception list as per clause (c) to section 43(5) of the Act. The transaction undertaken for the sale & purchase of the shares in F&O market to safeguard the loss on account of price fluctuations of the share held by the assessee within the same script cannot be regarded as speculation transactions. Disallowance u/s 14A - shares/securities held as stock in trade - Held that:- Provisions of section 14A read with rule 8D of the Act are squarely applicable even for the shares/securities held as stock in trade. In the instant case the shares were held as stock in trade but no disallowance of any expenditure was made. We also find that no submission or any calculation was made before the AO at the time of assessment showing that no expenditure was incurred in connection with the dividend income. In the absence of any information the AO has no option except to resort to the provisions of rule 8D of Income Tax Rules 1962. Accordingly the plea of the assessee with regard to the satisfaction is not tenable. Hence this ground of Assessee’s CO is dismissed. Addition on account of the payment of club membership fees - Held that:- As decided in case of Commissioner of Income-tax, Patiala v. Groz Beckert Asia Ltd. [2013 (2) TMI 375 - PUNJAB & HARYANA HIGH COURT] corporate membership was obtained for running the business with a view to produce profit. Such membership does not bring into existence an asset or an advantage for the enduring benefit of the business. It is an expenditure incurred for the period of membership and is not long lasting. By subscribing to the membership of a club, no capital asset is created or comes into existence. By such membership, a privilege to use facilities of a club alone, are conferred on the assessee and that too for a limited period. Such expenses are for running the business with a view to produce the benefits to the assessee. Consequently, it cannot be treated as capital asset. - Decided in favour of assessee TDS u/s 194C - non deduction of tds on catering charges - disallowance u/s 40(a)(ia) - Held that:- Assessee has organized the conferences and has purchased food items from M/s Deluxe Caters for the persons who attended the conference. From the facts of the case, we find that the instant transaction is solely purchase of food items and therefore, same is out of purview of TDS provision. The provisions of TDS u/s. 194C of the Act are applicable for a works on contract and they do not apply on the sale-purchase of products. Therefore, in our considered view, the transaction for purchase of food items is out of purview of TDS provision. - Decided in favour of assessee
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