TMI Blog2015 (6) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... i) pertaining to the investment activity is also to be considered as deduction, while working out the capital gain. Accordingly, the assessing Officer is directed to examine the nexus with borrowed funds on which interests was claimed to the utilization of funds either in investment activity or in business activity and disallow amount accordingly under section 36(1)(iii) and consider whether it is allowable while working our capital gain etc. Thus issue in this ground is restored to the file of the Assessing Officer for fresh consideration after examining the facts and to decide according to law. Assessee should be given an opportunity to make submissions and furnishing the necessary details in this regard. - Decided in favour of assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2006, 1912/Mum/2008, 1494/Mum/2005 and 4682/Mum/2007 dated 24/12/2012 wherein it was held as follows:- 8.1 Considering the arguments of the learned Counsel and the learned Departmental Representative, we are of the opinion that the issue is to be reexamined by the Assessing Officer in the light of the decisions taken in AY 2001-02 above. Unless there is a finding that assessee's investment is not business activity and the funds are not utilized for the purpose of business, disallowance under section 36(1)(iii) does not arise. There is no disallowance under section 14A in this year as the dividend income was taxable. Therefore, the interest disallowance has to be considered under section 36(1)(iii). If there is income or loss under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of appeal and the order of the coordinate Bench, the impugned issue has been restored to the file of the AO. In these circumstances, we also feel, that in the interest of justice and for getting the consistency, the issue must be restored to the file of the AO in the current year as well, as directed by the CIT(A).This observation of the CIT(A), we endorse. 2.4 Respectfully following the above order of the Tribunal we are inclined to restore the above grounds raised by the assessee in both the appeals to the file of the AO on similar direction. Accordingly, this ground in both the appeals is partly allowed for statistical purposes. 3. The second ground in assessee s appeal in ITA No.4779/Mum/12 is as follows :- The ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares, as Speculation Loss instead of Business Loss under explanation to Section 73 of the Act. 4.1 After hearing both parties we are of the opinion that this issue is fairly covered by the order of the Tribunal in ITA No.5372/Mum/22 vide order dated 20/11/2012 in assessee s own case wherein in the earlier order of the Tribunal in ITA No.3724/Mum/2005 for assessment year 2001-02 was followed, wherein it was observed as follows:- On identical ground, the notional interest allocted to stock-in-trade of shares has been confirmed as speculation loss by the Hon ble ITAT D Bench, Mumbai in the case of sister concern, M/s. Ganjam Trading Co. Pvt. Ltd. vs. DCIT (ITA No.3724/Mum/2005)A/Y 2001-02, (ITA No.932/Mum/2006) A/Y 2002-03 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses, even though the liability crystallized during the year. 5.1 Thus above grounds are dismissed as not pressed. 6. In the result, appeal of the assessee in ITA No.4779/Mum/12 is partly allowed for statistical purposes. 7. Now we take up assessee s appeal in ITA No.4778/Mum/2012(Assessment Year :2007-08): 7.1 Ground No.1 is as follows:- 1.The ld. CIT(A), has erred on facts, in law and in the circumstances of the case in coming to the conclusion that the appellant is not covered by the exceptions to Explanation to Section 73 of the Income tax Act, 1961 and in treating ₹ 3,91,46,184/- to be interest on funds deployed in stock-in-trade of equity shares and allowing the same to be carried forward as Speculation Loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on smallness of the amount of addition. 4. The ld. CIT(A) erred in law, on facts and in the circumstances of the case is not considering the disallowance made by the appellant in computation of income u/s. 40(a)(ia) of the Act thereby disallowing interest more by that amount than actual amount debited to P L Account. 7.8 The above ground is dismissed as not pressed. 8. In the result, appeal of the assessee in ITA No.4779Mum/12 4778/Mum/12 are partly allowed for statistical purposes. 9. Now coming to the revenue appeal in ITA No.5126/Mum/2012, the revenue has raised the following grounds :- 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred I holding that for computation of the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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