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TMI Blog2015 (7) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... s of misdeals, an amount of Rs. 26,63,131/- was debited and the same was represented under the head loss on account of purchase and sale of substantial quantity of shares during the relevant assessment year and the assessee also claimed deduction of expenditure towards interiors for his new office to the tune of Rs. 30,77,279/-. The assessee was issued with notice under Section 143(2) on 14.08.2009 and notice under Section 142(1) dated 14.07.2010 and another notice on 21.09.2010 calling for details from the assessee, for the purchase and sale of the shares and copies of the bills for the interior work done and the same were also produced by the assesee. 3. The Assessing Officer held that the loss of Rs. 26,63,131/-suffered by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that substantial quantity of shares have been purchased and sold by the appellant during the year which has resulted in loss of Rs. 26,63,131/-. The AO has treated the said loss as speculation loss by virtue of explanation to sec.73 and explanation to sec.28. As the loss suffered by an assessee company on dealing its shares on its own account was a speculation loss, and therefore could not be allowed to be set off against brokerage income. In view of the above, the appellant's contentions are not accepted and the action of the AO in this regard is upheld. As a result, the grounds raised are dismissed. 5. The learned Commissioner of Appeals in para 7.2 of his order also dealt with the issue relating to the expenditure incurred for inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions will not amount to speculative loss by virtue of Section 43(5) of the Act. The assessee in support of such contention also relied on the following decisions: (i)ITAT Kolkatta in Dy.Ld.CIT v. Madanlal Ltd in (2012) 21 Taxmann.com 444 (kol) and(ii) ITAT Chennai in Dy. CIT V. Paterson Securities (P) Ltd (2010) 127 ITD 386 (chennai). 9. The original authority rejected such contention and was of the view that the assessee is a broker in shares and also engaged in the business of trading in shares and the loss sustained during the course of trading in shares is not a business loss, but loss on account of speculation by virtue of Section 73 and Explanation 2 to Section 28. The learned Assessing Officer, in support of such observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls or purchase and sale of shares by actual delivery, or trading in derivatives in a recognised stock exchange cannot be considered to be loss on account of speculation. Conversely it has to be treated as the business loss of the assessee. More over it is pertinent to mention that misdeals happen involuntary during the course of the assessee's business activities which is beyond the control of the assessee. Purchase and sale of shares is not the business of the assessee. Purchase and sale of shares is not the business of the assessee company because all such purchase and sale of shares are made on behalf of the clients of the assessee company earning brokerage towards the same. In arriving at this conclusion, we have also drawn support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Mad). Held : dismissing the appeal, that the assessee had spent a sum of Rs. 1,85,557/- towards painting, re-laying of the damaged floors, partitions, etc. The co-owners were the directors of the asessee. But they were separate entities. The co-owners were admitting the rental income. They were also paying tax on the profits arising out of the hospital. The lease deed spoke of the normal requirements which the co-owners provided. The assessee was putting the building to a special use. No landlord would ever incur or undertake to bear the expenditure. The expenditure was incurred by the assessee on a leased property and had to be allowed as revenue expenditure. (ii)Thiru Arooran Sugars Ltd. V. Dy.CIT (2013) 350 ITR 324. Held : that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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