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2016 (5) TMI 459 - ITAT AHMEDABAD

2016 (5) TMI 459 - ITAT AHMEDABAD - TMI - Allowance on account of speculation loss - Held that:- We are not inclined to interfere with the findings of CIT(A) who has rightly granted relief to the assessee on account of speculation loss

Addition on belated payments of Provident Fund - Held that:- The assessee did not deposit the amount of contribution with the PF Department / DSI Department within due date under the PF Act and/or ESI Act - There is no amendment in Section section 36(1 .....

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nation to section 36(1)(va) of the Act - By deleting Second Proviso to section 43B by Finance Act, 2003, it cannot be said that Section 36(1) (va) is amended and/or explanation below clause (va) of sub-section (1) of section 36 is deleted, which is with respect to employees' contribution - See COMMISSIONER OF INCOME TAX II Versus GUJARAT STATE ROAD TRANSPORT CORPORATION (2014 (1) TMI 502 - GUJARAT HIGH COURT)- additions confirmed - Decided in favour of Revenue.

Disallowance u/s 40(a)( .....

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iding due opportunity of hearing to the assessee. - ITA No. 1558/Ahd/2012 & CO No.185/Ahd/2012 - Dated:- 30-3-2016 - SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Revenue : Smt. Sonia Kumar, Sr-DR For The Assessee : Smt. Urvashi Shodhan, AR ORDER PER SHAILENDRA K. YADAV, JUDICIAL MEMBER: This appeal filed by the Revenue and the Cross-objection thereof filed by the assessee are directed against the order of the Commissioner of Income Tax (Appeals), Val .....

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e facts and circumstances of the case and in law, the ld. CIT(A) has erred in granted relief to the assessee on account of commission expenses amounting to ₹ 65,664/- 3. The brief facts of the case are that the assessee is engaged in the business of manufacturing of copper alloys and ingots. The assessee e-filed its return of income on 26.09.2009, declaring total income at ₹ 3,44,39,975/- under the regular provisions and a book profit of ₹ 3,06,72,816/- u/s 115JBof the Act. The .....

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y and determined the total income at ₹ 3,92,96,850/-. 4. The first issue before us is with regard to the disallowance of loss on commodities of ₹ 46,16,944/-. During the course of assessment proceedings, the Assessing Officer disallowed the loss on commodities amounting to ₹ 46,16,944/-. In appeal, CIT(A) has deleted the same. Revenue is in appeal before us, to the assessee on account of speculation loss amounting to ₹ 46,16,944/- and requested to set aside the order of t .....

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ansactions in respect of trading derivative referred to in clause (ac) of Section 2 of the Securities Contracts (Regulation) Act, 1956, carried out in a recognized Stock Exchange are eligible transaction for claiming loss and shall not be deemed to a speculative transaction. Relying on certain case laws, the CIT(A) has rightly allowed the appeal of the assessee. Similar issue came up before the Co-ordinate Bench of this Tribunal in the case of Vimal Oil & Foods Ltd vs. ACIT, in ITA No.2392/A .....

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n eligible transaction in respect of trading in derivative referred to in clause (a) of sub Section (2) of Securities Contract (Regulation) Act, 1956 carried out in a recognized Stock Exchange shall not be deemed to be speculative transactions. Thus, from 1st April, 2006 trading in derivative carried through the recognized Stock Exchange was treated as non-speculative transactions. For the purpose of clause (d), Rule 6DDA and 6DDB of IT Rules, 1962, provided that notification of recognized Stock .....

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it would be seen that rules which have been prescribed are only procedural in nature, as it prescribes the method as to how to apply for necessary recognition and consequent notification. Hence, these are purely procedural mechanism adopted for the same when a rule or provision does not affect or empower any right or create an obligation but merely relates to procedural mechanism, then it is deemed to be retrospective unless such an inference is likely to lead to an absurdity. If the amendment .....

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the Central Govt. The notification issued under Rule 6DDB, does not empower any right or create obligation but only recognizes what is already provided in statute. Thus, the transactions carried out through MCX Stock Exchange after 1.4.2006, would be eligible for being treated as non-speculative derivates within the meaning of clause (d) of proviso to section 43(5). 6. In view of the above, the Assessing Officer is directed to delete the disallowance of loss of ₹ 4,82,270/- incurred by as .....

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the decision of Hon ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation, reported in (2014) 366 ITR 170 (Guj), wherein the Hon ble High Court held as under:- Held : Considering section 36(1)(va) of Income Tax Act as it stands, with respect to any sum received by assessee from any of his employees to which provisions of clause (x) of sub-section (24) of section 2 applies, assessee shall not be entitled to deduction of such amount in computing income referred to .....

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It can be said that there was a reference to explanation below clause (va) of sub-section (1) of section 36 in second proviso of section 43B (which has been deleted by Finance Act, 2003), only for purpose of defining due date as per explanation below clause (va) of subsection (1) of section 36. Therefore, by deleting Second Proviso to section 43B by Finance Act, 2003, it cannot be said that Section 36(1) (va) is amended and/or explanation below clause (va) of sub- section (1) of section 36 was d .....

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fund or funds on or before due date mentioned in explanation to section 36(1)(va). Consequently, it was held that learned tribunal had erred in deleting respective disallowances being employees contribution to PF Account / ESI Account made by AO as, as such, such sums were not credited by respective assessee to employees accounts in relevant fund or funds (in present case Provident Fund and/or ESI Fund on or before due date as per explanation to section 36(1)(va) of Act i.e. date by which conce .....

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ed in favour of revenue. With this, all these appeals are allowed. (Para 8) 5.1 In the light of above legal discussion, we set aside the order of the CIT(A) in this issue and restore that of Assessing Officer. Accordingly, this ground of Revenue is allowed. 6. Next issue is with regard to the commission expenses amounting to ₹ 65,664/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee has paid commission amounting to ₹ 65,664/- to M/s. Ari .....

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A) has been opposed by the Revenue, inter alia, submitting that the CIT(A) has erred in granting relief to the assessee on account of commission expenses amounting to ₹ 65,664/-and ld. Departmental Representative pleaded that the order of the CIT(A) be set aside and that of Assessing Officer be restored. On the other hand, ld. Authorized Representative supported the order of the CIT(A). 6.2 We have heard the rival submissions and perused the material on record. We find that the assessee ex .....

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