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ITO 16 (1) (1) , Mumbai Versus Manish S. Mehta

2017 (9) TMI 844 - ITAT MUMBAI

Addition u/s 14A r.w. Rule 8D - application of own fund to earn the exempt income - Held that:- CIT(A) nowhere applied the provision of section 14A r.w. Rule 8D of the Act properly. It has also not been observed that the assessee has applied his own fund to earn the exempt income or not. No satisfaction was recorded to decline the claim of the assessee if any. The facts are not disputed. The application of the funds have nowhere bifurcated. Since, there is no proper application of the provision .....

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Options - claimed as speculation loss in Return of Income - Held that:- We noticed that the AO has already allowed the claim of the assessee for the A.Y 2007-08 and 2010-11 and specifically held that the income from F & O activities pertain to the head of business and not speculation. In the A.Y. 2007-08. AO has held that the as per Section 43(5) of the Act, loss in deviating trading is a business loss and therefore as per section 71 the same has to be set off against the income under any other .....

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dance with law. Therefore, the finding no irregularity and illegality in the order passed by the CIT(A) on this issue we confirmed the finding of the CIT(A) on this issue and decided this issue in favour of the assessee - I.T.A. Nos.1831/M/2014 &1832/M/2014 And I.T.A. Nos.1152/M/2014 - Dated:- 13-9-2017 - SHRI B.R. BASKARAN, AM AND SHRI AMARJIT SINGH, JM For The Assessee : Shri Bhavesh Mehta For The Department : Shri Suman Kumar (DR) ORDER PER AMARJIT SINGH, JM: The assessee as well as the reven .....

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where-in it is mandatory to apply Rule 8?' 2. "Whether on the facts and circumstances and in law, the Ed C1T4) has erred in restricting the disallowance made w 144 read with Rule 8tJ of the I-tax Act, 1961 where-in it is mandatory to apply Rule 8D in respect of income not forming part of the income?" 3, "Whether on the facts and circumstances and in law, the LdCIT(A) has erred in restricting the disallowance made its 144 read with Rule 8D of the I-tax Act, 1961 without noting .....

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.01.2014. The last date for filing appeal is 17.03.2014. 3. The brief facts of the case are that the assessee filed his return of income on 27.09.2010 declaring total income to the tune of ₹ 7,31,877/- and loss to the tune of ₹ 4,65,597/- under the head of long term capital gain. The assessee was an individual and has earned profit on sale of share and showed a sum of ₹ 2,91,51,467/- as income from short term capital gain. The assessment u/s 143(3) was completed on 24.08.2011 d .....

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nnection with the assessing the expenditure incurred to the earn the exempt income by the CIT(A) to the tune of ₹ 8,76,302/ lacs u/s 14A r.w. Rule 8D. The Assessing Officer assessed the expenditure to earn the exempt income to the tune of ₹ 33.30,847/-. The Ld. representative of the revenue has argued that the AO has rightly assessed the expenditure to earn the exempt income to the tune of ₹ 33.30,847 which has been wrongly assessed by the CIT(A) to the tune of ₹ 8,76,302 .....

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he I.T. Rules, 1962. It has been contended by the appellant that the investment in shares were made out of the appellant s own funds along with the interest free borrowings from friedns and relatives and hence, the calculation made by the Ld. AO was incorrect. In this regard, the Ld. AR has contended that out of the sum of ₹ 66.44,837/- the sum of ₹ 59,27,149/- has been disallowed as per para 5.2 of the impugned order. This addition on protective basis has not even been agitated in a .....

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order) 5,26,537 Disallowance u/s 14A r.w. Rule 8D 8,76,302 5. On appraisal of the above mentioned order, we noticed that the CIT(A) nowhere applied the provision of section 14A r.w. Rule 8D of the Act properly. It has also not been observed that the assessee has applied his own fund to earn the exempt income or not. No satisfaction was recorded to decline the claim of the assessee if any. The facts are not disputed. The application of the funds have nowhere bifurcated. Since, there is no proper .....

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14:- 6. The assessee has raised the following grounds:- 1. Whether on the facts and circumstances and in law, the Ld. CIT(A) was justified in allowing the alleged loss occurred in trading of futures and Options which was claimed as speculation loss in Return of Income? 2. Whether on the facts and circumstances and in law, the Ld. CIT(A) has erred in not taking cognizance of Hon. Supreme Court of India decision in case of Goetze (India) Ltd. Vs. CIT 284 ITR 323 (2006); Wherein it is ascertained t .....

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y, The Appellant prays that the order or the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. A copy of the CIT(A)'s order was received by this office on 17.01.2014. The last date for filing appeal is 17.03.2014. 7. The facts of the present case are that quite similar to the facts of the case as narrated in the above mentioned appeal bearing no. 1831/M/2014 but the figures are different, therefore, there is no need to repeat the same. 8. All the issues .....

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. CIT 284 ITR 323 (2006). However, on the other hand, the Ld. representative of the assessee has refuted the said contentions. Before going further it is necessary to advert the finding of the CIT(A) on record.:- 1 also find that the Ld. AC in the appellants own case while passing now u/s. 143(3) of the Act for A. Ys 2007-08 and 2010-11 has held that income from F & C) activities pertains to the head business and not speculation. So much so in the assessment order for the AY, 2007-08, Ld.. A .....

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he carry forward at F & 0 loss as business loss in A.Y. 2008-09 was contrary to the rule of law and inconsistent with die findings given in the earlier and later years. What is rectifiable u/s. 154 of the Act is not only a mistake of fact but also a mistake of aw, and a wrong cairn made by the appellant cannot be taken advantage of if it is patent from records that the loss being claimed was on account of F & C activity. 14. AC is accordingly directed to verify the records produced by th .....

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