TMI Blog2015 (1) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... d that:- In CIT Versus Nasa Finelease P. Ltd. [2013 (9) TMI 733 - DELHI HIGH COURT] it has been rightly held that the transactions in derivatives on recognized stock exchange not as deemed speculative - the transaction carried in future and options (derivatives) are outside the purview of “speculation loss” in terms of amendment made by the Finance Act, 2005 with effect from 1.4.2006 by inserting Clause (d) to the proviso to subsection (5) of Section 43 of the Act defining the meaning of “Speculation Transaction” - the dealing in derivatives was a regular business and it is not that the assessee has been incurring losses always, as in the immediately succeeding AY 2009-10, the assessee has earned a profit on trading in future and options (derivatives) - Decided against revenue. Claim of expenses u/s 57(iii) – Expenses made wholly & exclusively for the purpose of earning such income or not – Held that:- CIT(A) was rightly of the view that the assessee has not been able to justify the claim of the entire expenses - considering the nature of expenditure being office maintenance, salary paid, conveyance, legal and professional expenses found it unjustifiable to assume that no expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m house property. The Ld. CIT(A) has, however, allowed the claim of the assessee, against which revenue is in appeal. 5. In support of the ground the Ld. Sr. DR has placed reliance on the assessment order. He pointed out that from partnership deed the business of the assessee also consist of sale and letting out / renting out business centre. Hence, the rental income has rightly been treated by the AO as business income. He submitted further that on building worth ₹ 35.9 crores earning of rent of ₹ 14.17 crore appears to be disproportionate to the value of the property. He argued, further, that the assessee has not claimed deduction on account of municipal taxes, salary and personal administrative charges. He also placed reliance of decision of the Hon ble Gujarat High Court in the case of Messers Neha Builders Vs. CIT, 226 ITR 661 holding that where assessee is engaged in business of development, construction, sale and lease of movable property, the same is business and not rental income. Ld. Sr. DR also placed reliance on decision of Hon ble Supreme Court in the case of Mc. Dowell and Company Ltd. Vs. CTO 154 ITR 148(SC). 6. Ld. AR on the other hand tried to jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pped and the godown were let out to another concern. As the godown has seized to be the business assets on account of closure of manufacting business, it treated the income to be chargeable as income from the house property u/s 23 of the Act. It was noted that asset seized to be commercial assets and therefore, income was to be treated as income from house property. Ld. CIT(A) upheld the views of the Assessing Officer. The Tribunal hold that there was cessation of business and the department was right in its conclusion that income was taxable under the head income from house property . The Hon ble High Court approved the decision of the Tribunal. 8. Under almost similar facts in the case of ACIT Vs. Messers Atri Partners (Supra) an identical issue has been decided by the Tribunal in favour of the assessee. We, thus, find that there is no infirmity in the First Appellate Order accepting the claimed income as income from the house property and the claimed deduction u/s 24(1) of the Act. The same is upheld. The issue no. (A) is thus decided in favour of the assessee. 9. Issue no. (B) : At the outset of hearing the Ld. AR pointed out that issue raised is squarely covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-10, the assessee has earned a profit of ₹ 1,49,85,721/- on trading in future and options (derivatives). In the cited decisions in the case of P.S.Kapoor Vs. ACIT (2009) 120 TTJ (JP) 422, 428, and ACIT Vs. Hiren Jaswantrai Shah (2011) 46 SOT 276 (Ahd.), before the Ld. CIT(A), on which Ld. CIT(A) has relied upon, has been held that derivatives transaction would be eligible for being treated as nonspeculative transaction within the meaning of Clause (d) of proviso to section 43(5) of the Act. Under these background, we are of the view that the Ld. CIT(A) has rightly deleted the disallowance of the claimed loss of ₹ 1,73,92,002. The issue no. B is, thus, decided in favour of the assessee. In the result the appeal is dismissed. ITA No. 695/Del/2013 (A.Y. 2009-10) 13. The revenue has questioned first appellate order on the following grounds : 1. The CIT(A) has erred in deleting the addition of ₹ 4,51,32,184/- made by the AO by treating rental income as business income. 2. The CIT(A) has erred in directing the AO to assess rental income under the head Income from House property without appreciating the fact that assessee is engaged in the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t since the assessee has no ground to claim deduction of expenses amounting to ₹ 7,76,200/- against the income from other sources amounting to ₹ 80,46,782/-, the same was disallowed. Considering the facts of the case and submissions of the assessee the Ld. CIT(A) held that the assessee has not been able to justify the claim of the entire expenses. He, however, considering the nature of expenditure being office maintenance, salary paid, conveyance, legal and professional expenses found it unjustifiable to assume that no expenses whatsoever has been incurred for earning an income of over ₹ 80,00,000/- from other sources. He, thus, keeping in view the provision of Section 57 (III) of the Act and judicial decisions cited before him allowed a relief of ₹ 1,20,000/- i.e. at the rate of ₹ 10,000/- per month on account of expenses or maintenance of its status as a firm. He accordingly, sustained the addition of ₹ 6,06,200/-. We find that the first appellate order is reasoned one, hence, no interference therewith is required. The same is upheld. Ground no. 3 is accordingly rejected. In the result appeal is dismissed. 18. In summary, both the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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