TMI Blog2015 (7) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... d by business houses controlling groups of companies as tax avoidance device correctly answered the same in favour of the assessee. The loss suffered by the assessee on account of misdeals 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee also claimed deduction of expenditure towards interiors for his new office to the tune of ₹ 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 ₹ 26,63,131/-suffered by the assessee on account of share trading as share broker is not a business loss, but speculative loss as per Explanation to Section 73 and as per Explanation 2 to Section 28 and set off against the income from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id 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 interior work in the rented premises and answered the same against the assessee. Questioning the correctness of the findings of the Commissioner of Income Tax (Appeals), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 observation, also relied on the following decisions: (i)BLK Securities P. Ltd. ITAT (Del) (2009) 27 SOT 142 (ii)SPFL Securities Ltd ITAT (Del) (2006) 6 SOT 562 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 from the decision cited by the assessee. Accordingly this issue is decided in favour of the assessee. We find no reason to disagree with such findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titions, 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 the temporary structure by means of false ceiling and office renovation had not resulted in any capital expenditure. From the above decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
