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2018 (1) TMI 242 - AT - Income TaxDisallowance of loss - loss suffered due to brazen embezzlement during the course of share trading business by the errant officials of Religare Securities Ltd - Held that:- As perused the award dated 10.06.2008 filed by the assessee it appears that the claim of the assessee against M/s. Religare Securities Ltd was that they had incurred a loss in the matter of trading on behalf of the assessee in future and option segment and that because of the negligence in not taking proper position in future and option segment of buying and selling securities, the loss has occurred. The plea of M/s. Religare Securities Ltd was that the assessee did not give proper instructions of taking position in future and option segment and therefore he cannot disown the loss. M/s. Religare Securities Ltd had not disputed the quantum of loss as of ₹ 15,76,022/-. The arbitrator ultimately found no substance in the claim of the assessee and dismissed the claim of the assessee against M/s. Religare Securities Ltd. This evidence is sufficient to prove the claim of the assessee that he had incurred a loss of ₹ 15,76,022/-. The loss is directed to be allowed as deduction. Ground no.1 is allowed. Addition on account of interest on IL & FS for margin funding in Future and Option Trading of Share - Held that:- The assessee claims that interest need not be capitalized as cost of investment . Therefore the claim for allowing as revenue expenditure ought to have been allowed by the Revenue authorities. Therefore direct the AO to allow the claim of the assessee. However it is made clear that the assessee cannot claim this interest as cost of investment in future. The assessee has made a statement across the bar that the assessee undertakes not to make such a claim. Ground No.2 is accordingly allowed.
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