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2017 (1) TMI 1752 - ITAT MUMBAILoss as a speculation loss - Loss as incurred on squaring off of erroneous trades executed on behalf of the clients and devolved on the appellant - allocation of expenses to the loss incurred on squaring off of erroneous trades - HELD THAT:- Looking at the turnover and assessee’s commission income, operational default by assessee’s huge staff cannot be held as unreasonable. The assessee’s total income is a loss and not a positive figure. The accounts are duly audited and follow the established rules and norms. The loss caused by operational default of the employees cannot be treated as loss on account of speculation activity of the assessee and such loss represents normal business exigencies. Such type of business exigencies cannot be assumed to be speculative activity so much to attract explanation to section 73. Expenses incurred by the appellant relate to its normal broking activity - HELD THAT:- Since it is held that there no speculation activity carried on by the assessee consequently; there is no justification in disallowing the same expenditure assuming speculation activity. Besides assessee has demonstrated that expenditure disallowed represent institutional fees and other incidental expenses, which has not be factually disallowed by the authorities below. In view thereof, both the disallowances are deleted and the assessee’s grounds are allowed.
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