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2015 (7) TMI 909 - AT - Income TaxDisallowance of speculation loss by invoking the provisions of Explanation to Sec. 73 - CIT(A) deleting the addition - Held that:- Assessee filed complete details of deployment of fund during last three years including the position of income and turnover of the assessee in different business. At this stage it is not possible to verify these details because this is being filed now for the first time before us. We find that the AO has only verified the deployment of funds for last three years and has not gone into the profits earned from various sources and also the turnover of the assessee from various sources. However, CIT(A) has only examined increase in loans and advances and not compared it with investment in shares. As the authorities below have lacked in their investigation into the correct facts, we feel that this issue needs re-examination. In term of the above, we set aside this issue to the file of the AO for fresh examination of this issue in terms of the Explanation to section 73 of the Act, wherein the AO will first determine the principal business of the assessee. For this, the AO will find out the deployment of funds in shares and in other business. The AO will also find out the profit or loss from shares and also in other business. The AO will also find out the turnover of the assessee in all the business and then compare the same on comparative basis. He has to give a finding qua the principal business of the assessee and then decide the issue - Decided in favor of assessee for statistical purposes. Disallowance u/s 14A - CIT(A) deleting the addition - Held that:- The assessee has earned dividend income of ₹ 58,311/- and the same is exempt income inviting the provisions of section 14A of the Act read with Rule 8D of the Rules. We find from the assessment order that there is no satisfaction recorded for application of Rule 8D of the IT Rules 1962 and simply formula prescribed under the said Rule is applied without giving any finding qua the nexus of expenditure with exempted income. Hence, we confirm the order of the CIT(A) and this issue of appeal of Revenue is dismissed. - Decided against revenue.
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