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TMI Blog2018 (2) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... tion business as per the Explanation to section 73 of the Income Tax Act, 1961. 2. The assessee in the present case is a company which is engaged in the business of running consultancy services and trading of shares. The return of income for the year under consideration was filed by it on 25.09.2010 declaring a total income of Rs. 58,38,034/-. During the course of assessment proceedings, the assessee was called upon by the AO to furnish the details of net profit/loss earned from share activity. In reply, the following working was furnished by the assessee showing net profit from share trading at Rs. 2,25,203/- and profit from speculation at Rs. 93,957/-: "Sales Rs. 15930672.96 Closing Stock Rs. 15930672.96 Less: Opening St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the common administrative expenses and treating the same as speculation loss in terms of Explanation to section 73 was challenged by the assessee in the appeal filed before the Ld. CIT(A) and after considering the submissions made by the assessee as well as the material available on record, the Ld. CIT(A) deleted the said addition for the following reasons given in paragraph no 8.2 of his impugned order: "I have examined the facts of the case. The appellant has earned a net profit from share trading of Rs. 2,25,204/- and profit from speculation of Rs. 93,957/-. Consequently there is no evidence of any loss. Section 73 of pertains to losses in speculation business. In the case of appellant there is no apparent loss and the resultant l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecomputed by him by allocating the common administrative expenses on proportionate basis is deleted by the Ld. CIT(A) vide his impugned order inter alia by relying on the decision of Mumbai Bench of this Tribunal in the case of ACIT vs KNP Securities Pvt. Ltd. rendered vide an order dated 26.03.2010 passed in ITA No. 4412/Mum/2003. As rightly contended by the learned DR, the said case however is distinguishable on facts, in as much as the assessee in the said case was engaged in the business of share broking and share trading and since the same constituted one indivisible business, having a common set of books of accounts, common funds and common management, it was held by the tribunal that attribution of proportionate expenses was not corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, of such business is required to be computed and such computation has to be after taking into consideration all the direct and indirect expenses laid out or expanded wholly or exclusively for the purpose of the business. In the present case, the assessee company while computing the income from share trading activity had considered only the direct expenses and the indirect expenses such as administrative expenses which were partly attributable to the share trading activity, going by its nature, were not considered by it. In this regard, the learned counsel for the assessee has contended that even if the administrative expenses are to be considered as partly attributable to the share trading activity, the same cannot be allocated on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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