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Income Tax Officer-4 (3) (3) , Mumbai Versus M/s Mother India Securities Pvt. Ltd.

2015 (10) TMI 1879 - ITAT MUMBAI

Treatment to long term capital gain and short term capital gain loss - CIT(A) directing AO not to treat the long term capital gain and short term capital gain loss as speculation transactions - Held that:- No infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals) because there is no positive income available for taxation for the current year and even if, these are held to be speculative transactions, the loss was required to be set off against the profit during the year itse .....

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stances, allocation of expenses was not required. The Assessing Officer treated the allocation of expenses to be speculative activity of the assessee on the basis of percentage of income/profit. Ultimately, it is the turnover, which requires incurring of expenses, thus, we are in agreement with the finding of the ld. Commissioner of Income Tax (Appeals) that the allocation of expenses was required to be made on the basis of turnover as offered by the assessee because the assessee itself consider .....

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om the value of investments as directed by CIT(A) - Held that:- Without going into much deliberation, we note that under the facts available on record to this limited extent, we are in agreement with the ld. DR/Assessing Officer that the provision of section 14A read with Rule-8D of the Rules are applicable. The Tribunal, in the case of Dy.CIT vs Damani Estates and Finance Pvt. Ltd. (2013 (8) TMI 457 - ITAT MUMBAI) has clarified that Rule 8D shall apply qua the shares held as stock-in-trade. The .....

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ingh and Shri Sanjay Arora, JJ. For The Revenue : Shri A.Ramchandran. Sr.AR-DR For The Assessee : Shri Beharilal ORDER Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 06/02/2013, of the ld. First Appellate Authority, Mumbai. 2. The first ground pertains to directing the Assessing Officer not to treat the long term capital gain and short term capital gain loss as speculation transactions. The crux of argument advanced by ld. DR, Shri A. Ramachandran, is b .....

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1,904/- and also loss on account of trading in shares amounting to ₹ 1,72,33,233/-, which was treated as deemed speculation. The assessee carried forward the loss on account of alleged speculative income and ₹ 30,54,731/-. Pursuant to a notice by the Assessing Officer, the assessee vide letter dated 05/10/2011 filed statement of short term capital loss and long term capital gains. The reply of the assessee is reproduced hereunder:- In this context it is submitted that the assessee de .....

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the same are to be treated as short term capital asset and accordingly as per section 2(42B) the capital gain arising on the transfer of such asset should be treated as short term capital gain. However, the ld. Assessing Officer in view of explanation to section 73 of the Act held the transaction as speculative in nature and the entire long term capital gain of ₹ 41,24,265/- and short term capital loss of ₹ 30,54,731/- were treated as speculative income and adjusted with the specula .....

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cable in respect of loss in speculation business. The ld. Commissioner of Income Tax (Appeals) granted relief to the assessee. 2.3. The Revenue is aggrieved and is in appeal before this Tribunal. We find that the assessee is admittedly engaged in the business of trading of shares as investment. The assessee earned loss of ₹ 1,72,33,233/-. The question for consideration is whether the long term capital gain/short term capital loss of the assessee are in the nature of speculative transaction .....

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and purchase of share but the transaction in share, held as investment, give rise to LTCG/STCL, which cannot be held to be business of the assessee as has been asserted by the Revenue. In such a situation, even if, it is held to be speculative transaction, the losses expected to be set off against profit. No positive income is available for taxation for the current year, therefore, the profit of ₹ 41,24,261/- (Capital gains) is adjustable against other losses during the year itself. As pe .....

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s carried on by him assessable for that assessment year and (ii) If the loss cannot be wholly set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on. Thus, we find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals) because there is no positive income available for taxation for the current year and even if, these are held to be speculative transactions, the loss was required to be set off against the profit during .....

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eculation activity out of the total expenses of ₹ 38,04,755/- debited to the profit & loss account. The assessee had already allocated STT, stamp duty and transaction charges, totaling to ₹ 6,76,103/-. The assessee duly filed the statement of allocation of indirect expenses towards share trading income which was based on turnover. On the basis of percentage turnover, the assessee furnished details of expenses of ₹ 5,69,427/- to the share trading activities and the assessee .....

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ed. The Assessing Officer treated the allocation of expenses to be speculative activity of the assessee on the basis of percentage of income/profit. Ultimately, it is the turnover, which requires incurring of expenses, thus, we are in agreement with the finding of the ld. Commissioner of Income Tax (Appeals) that the allocation of expenses was required to be made on the basis of turnover as offered by the assessee because the assessee itself considered stamp duty expenses of ₹ 1,00,729/-, .....

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f investments. The ld. DR, defended the conclusion arrived at in the assessment order, whereas, the ld. counsel for the assessee supported the order of the ld. Commissioner of Income Tax (Appeals) 4.1. The facts, in brief, are that the assessee received dividend of ₹ 7,86,419/- which was claimed as exempt. The assessee in its return of income itself made disallowance of ₹ 78,642/- as expenses, being, 10% of dividend income as disallowance u/s 14A of the Act. However, the Assessing Of .....

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