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2017 (12) TMI 613

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..... ngly. Not allowing carry forward of speculation loss - Held that:- Admittedly, the assessee has claimed speculation loss in the return of income at ₹ 56,42,063/- but the AO himself has verified from the records that the speculation loss is at ₹ 1,04,65,899/-. According to us, the assessee is entitled for this loss and this has been verified by the AO from records. Accordingly, we direct the AO to allow the speculation loss at ₹ 1,04,65,899/-. The appeal of assessee is allowed and that of the Revenue is dismissed. - ITA No. 3323/Mum/2016 And ITA No. 4547/Mum/2016 - - - Dated:- 6-12-2017 - SRI MAHAVIR SINGH, JM AND SRI N.K. PRADHAN, AM For The Assessee : Prakash K Jotwani, AR For The Revenue : Ram Tiwari, DR .....

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..... Learned CIT(A) erred in not deleting addition made under Rule 8D(ii) of ₹ 50,08,589/- under Rule 8D(iii) of ₹ 1,03,392/- of Sec.14A directing AO to deduct the value of stock in trade for purposes of Rule 8D(iii) only not for Rule 8D(ii). 3. Briefly stated facts are that the assessee is engaged in trading of shares as well as stock broker. The AO during the course of assessment proceedings noticed that the assessee has earned exempt income i.e. the dividend income of ₹ 1,51,348/- and claim the same as exempt under section 10(38) of the Act. Accordingly, the AO computed the disallowance under section 14A read with Rule 8D(2)(ii) of Income Tax Rules, 1962 (hereinafter the Rules ) at ₹ 50,08,589/- and also u .....

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..... h the facts and circumstances of the case. At the outset, the learned Counsel for the assessee stated that the assessee s exempt income i.e. dividend income is to the tune of ₹ 1,51,348/-. According to him, the issue is squarely covered by the decision of Hon ble Delhi High Court in the case of Joint Investment Pvt. Ltd. vs. CIT (2015) 372 ITR 694 (Delhi), wherein it is held that the window for disallowance was indicated in section 14A of the Act and was only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income. This proportion or portion of the exempt income surely cannot swallow the entire amount. In view of the above Delhi High Court decision, the learned Counsel for the assessee fa .....

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..... ounsel for the assessee took us through the assessment order at Para 6 which reads as under: - 6. For the year under consideration, the assessee company has claimed the following losses: AY 2009-10 Speculation Loss 56,42,063/- Business Loss 27,14,160/- Depreciation Loss 19,33,204/- AY 2010-11 Business Loss 6,45,656 The same has been duly verified from records and observed as under:- AY 2009-10 ( Assessed Income / Loss vide order U/s 143(3) dated 15/12/2011) .....

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..... as submission of the appellant. The main crux of the appellant's submission is that AO has made mathematical error while quantifying the amount of disallowance. This being the case, the issue becomes whether the disallowance made by the AO is mistake apparent from record or not. I have a thoughtful consideration to the same and I am of considered opinion that the appellant should have move rectification petition u/s.154 before the AO and if the same was rejected by the AC), then only, the appellant could have pursued the matter in appeal. Since, the appellant has not made out any case on merit and has harped upon mathematical error on computation of the amount of disallowance; this ground of appeal is Dismissed being pre-mature and jum .....

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