TMI Blog2018 (1) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... ther increase in share capital was for enhancing the working capital or for some fixed capital investment. The AO has also not considered the alternative arguments of assessee with regard to deduction u/s.35D. In the interest of justice, restore this ground for file of AO for deciding afresh as per law. Disallowance u/s.14A - Held that:- No disallowance can be made when there is no exempt income. See Cheminvest Limited vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] - ITA No. 4657/Mum/2017 - - - Dated:- 18-1-2018 - Shri R. C. Sharma, AM Assessee by : Shri Dharmesh Shah Revenue by : Ms. N. Hemalatha ORDER Per R. C. Sharma ( A. M ) This is an appeal filed by the assessee against the order of CIT(A)-3, Mumbai dated 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of scrutiny assessment, AO disallowed assessee s claim of business loss and trading of currency derivatives on recognised exchange, by treating the same as speculation in nature. 5. I have considered rival contentions and found that the issue under consideration is squarely covered by the decision of the Co-ordinate Bench in case of IVF Advertisers Pvt. Ltd., 39 ITR 541, wherein Tribunal held as under:- The assesses was an investment management consultant. For the assessment year 2009-10, it claimed loss-on account of foreign currency futures. The Assessing Officer held that the loss could not be allowed in the light of the provisions of section 43(5) of the Income-tax Act, 1961 read with section 2(ac) of the Securities Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntered into a call option or put option and on the settlement day the transaction has been settled by delivery, either the assessee has paid US dollar on the settlement day or has taken delivery of US dollar. To sum up, the derivatives include foreign currency and call option/put option, are transactions of derivative markets and cannot be termed as speculative in nature. Considering the totality of the facts and in the light of the judicial discussion hereinabove, we have no hesitation in setting aside the order of the learned Commissioner of Income-tax (Appeals). The appeal filed by the assessee is accordingly allowed. 8. As the facts and circumstances during the year are same, respectfully following the order of the Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 35D was not considered. In my opinion, this is not correct. I have gone through the reasoning adduced by the ld. Judicial Member. In my opinion he took a correct view in the matter. I concur with his decision on this issue. 11. It was also argued that alternatively AO did not allow the statutory deduction u/s.35D of the IT Act. 12. I have considered rival contentions. However, it is not clear from the record as to whether increase in share capital was for enhancing the working capital or for some fixed capital investment. The AO has also not considered the alternative arguments of assessee with regard to deduction u/s.35D. In the interest of justice, I restore this ground for file of AO for deciding afresh as per law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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