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TMI Blog2015 (8) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on facts in confirming the disallowance of the entire business expenses of Rs. 1,93,045/ - u/ s 14A r.w. Rule 8D of the Income Tax Act,1961 without properly considering the fact that the appellant is having substantial Business Income of Rs. 78,48,948/ - as compared to the tax free dividend income of Rs. 8,95,949/-. 2. The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the interest income of Rs. 22,55,865/- as Income from Other Sources instead of Business Income as claimed by the appellant in view of the facts that the appellant is carrying on finance business as per Partnership Deed. 3. The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the re-computat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same and earning of dividend income was only incidental, no part of interest paid on investment or the depository/ custodial charges could be disallowed by invoking section 14A- The AO cannot merely allocate the expenses in relation to trading results by proportionately disallowing the same. The assessee further relies on judgement of Hon'ble Bombay High court in the case of CIT Vs. Reliance Industries Ltd.[2011] 39 ITR 632 (Bom). On the other hand, ld. DR relied on the orders of the lower authorities. 6. We have considered rival contentions and found that during the year assessee has received dividend income of Rs. 8,95,949/-, interest income of Rs. 22,55,865/- and other income of Rs. 4,352/-. In the profit and loss account, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 lakhs as against exempt income of Rs. 8.95 lakhs, we deem it appropriate to restrict the disallowance to the extent of Rs. 20,000/-. Accordingly, the AO is directed to restrict the disallowance u/s.14A to Rs. 20,000/-. 7. The next grievance of the assessee relates to taxing the business income earned in the form of interest as income from other sources. We have considered rival contentions and found that in addition to the share business assessee was also carrying on business of finance as per the clause 4 of partnership deed, wherein assessee has earned interest income of Rs. 22,55,865/-. However, the AO has considered it as income from other sources on the plea that interest is only incidental to the main business of share trading with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's claim of partners remuneration accordingly. 9. The revenue is aggrieved by action of CIT(A) for holding that loss suffered by the assessee on account of future and options transactions has to be considered as business loss and not be considered as speculation loss. We have considered rival contentions and found that the AO in the assessment order observed as under :- "It is seen from the computation of income that assessee has set off of carried forward loss for A.Y.2003-04 at Rs. 18,36,430/- and of A.Y.2005-06 at Rs. 20,96,497/- and consider as unabsorbed business loss. In this regard the assessee was asked to explain why the carry forward losses have been set off as the same are not allowable. The assessee's representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n my attention to the fact that in appellant's own case, the Hon. ITAT, 'A" Bench, Mumbai for A.Y. 2003-04 vide their order No. ITA NO.3085Mum/06 dated 30.01.2009 has held that the Future & Option trading losses are to be treated as business loss only and not as speculative loss. A copy of the aforesaid order has been placed on record. In view of the order of the Hon'ble ITAT in appellant's own case, the AO is directed to take necessary action with regard to the setting off of carry forward loss of A.Y. 2003-04 and A.Y. 2005-06. This ground of appeal is allowed for statistical purpose.' 11. We have considered rival contentions and found that the CIT(A) has restored the matter back to the file of AO with a direction to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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