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2015 (12) TMI 1117 - AT - Income TaxLoss on account of non-speculation transaction as speculation - Held that:- The trading of derivatives for the entire assessment 2006-07 is out of the definition of speculation business if it is carried out in the recognized stock exchange. The assessee has done the trading in the recognized stock exchange. So it is clear that loss on account of derivative transaction or very much covered in clause (d) of the proviso Section 43(5) of the Act. In view of such amendment under the Act, the income/loss arrived on derivative shall be treated as non-speculative loss. - Decided against revenue. Allowing relief of interest payment relying loss on trading of derivatives prior to 25.01.2006 as non-speculation business - Held that:- AO disallowed the interest paid by assessee up-to 25.01.2006 on the ground that it pertains to speculation business. Therefore, it should not be allowed. However, we find that Ld. CIT(A) has allowed the claim of interest expense by treating the loss from the derivative transactions as non- speculative business. We find that this ground relates to the first ground of Revenue’s appeal regarding treating the transaction of derivative as speculative business up to 25.01.2006. In the first ground of appeal, we have held the business of the assessee as nonspeculative. Accordingly, the interest disallowed by AO is allowable expense against the non-speculative business of the assessee. In our considered view, this ground of Revenue’s appeal is dismissed.- Decided against revenue. Disallowance u/s. 14A - Held that:- There was no applicability of Rule 8D in the instant case as this Rule 8D came in force w.e.f. 24.03.2008. In view of above, we find no reason to interfere in the order of Ld. CIT(A) and this ground raised by Revenue is dismissed.- Decided against revenue. Allowance for the expense of Security Transaction Tax (STT for short) - Held that:- STT was duly shown under the head ‘current asset’ in Schedule-7 for an amount of ₹ 1,38,26,870/-. Ld. AR further drew our attention on page 7 of the financial statement, wherein ‘transaction, Demat & share transfer stamp charges’ under the head of “Administrative charges” were written. Hence the ld. AR claimed that no expense for STT has been debited in the profit and loss account of the assessee. From the aforesaid discussion, we find that assessee has not debited any amount of STT in its profit and loss account in the year under consideration but AO misunderstood from the financial statement submitted by assessee, where transaction/demat and share transfer stamp charges were debited. Therefore we do not find any reason to interfere in the order of Ld. CIT(A) and this ground raised by Revenue is dismissed.- Decided against revenue. Rebate u/s 88E of the STT paid while working out the tax under the provisions of Minimum Alternate Tax (MAT) as specified u/s 115JB - Held that:- Rebate u/s 88E of the Act was to be allowed from the tax computed as per provisions of Sec.115JB of the Act to find out whether after set off of rebate u/s.88E of the Act, any tax liability remained or not. Admittedly, the tax liability as per MAT provisions was less and rebate admissible u/s.88E of the Act was more. Therefore, rebate u/s 88E had to be allowed even when total income is computed u/s. 115JB of the Act. Resultantly, the ground taken by Revenue is dismissed.- Decided against revenue.
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