TMI Blog2018 (2) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... h activity as rightly held by the A.O. 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. The allocation of administrative expenses made by the A.O. to share trading activity to the extent of 29.32% on the basis of the ratio of turnover is highly excessive and unreasonable and keeping in view the nature of expenses claimed by the assessee as administrative expenses as well as the nature of activity, it would be fair and reasonable to allocate 5% of the total administrative expenses to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the following working was furnished by the assessee showing net profit from share trading at ₹ 2,25,203/- and profit from speculation at ₹ 93,957/-: Sales ₹ 15930672.96 Closing Stock Rs. 15930672.96 Less: Opening Stok Rs. 3059745.36 Purchases ₹ 12591639.93 Gross Profit ₹ 279287.67 Less: Expenses Security Transaction Tax ₹ 36571.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the A.O. by working out the loss from share trading activity by apportioning 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 ₹ 2,25,204/- and profit from speculation of ₹ 93,957/-. Consequently there is no evidence of any loss. Section 73 of pertains to losses in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made by the A.O. by treating the loss from the share trading activity as speculation loss as recomputed 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 comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase and sale of shares of other company is treated as a deemed speculation business, the loss, if any, 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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