TaxTMI 
TaxTMI 
2017 (4) TMI 400
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....the disallowance of Rs. 11,84,784/- already made by the appellant as reasonable. Thus enhancing disallowance u/ s 14A by resorting to the computational machinery of Rule 8D(2) is bad-in-law and needs to be deleted. 1.2) Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming that Rule 8D(2)(ii) are applicable to the appellant without appreciating that the investments were made from own funds. Thus disallowance of interest expense (excluding bank guarantee commission and processing charges) u/s 14A being bad-in-law needs to be deleted. 2. Disallowance of indexed cost of acquisition of Rs. 28,91,234/- on sale of shares of BSE Ltd. On facts and circumstance of the case and in law, the learned CIT(A) erred in allowing indexation benefit on shares of BSE Ltd. from the date of acquisition of shares instead of the date on which the corresponding BSE Cards were acquired. The said shares were allotted to the appellant on account of conversion of BSE cards into shares pursuant to demutualization of stock exchange. Accordingly the disallowance of indexed cost of acquisition o....
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.... the A.O. that the write off is on account of the' client not being able to satisfy his, part of the contractual" obligation whereas the assessee 'has' to' satisfy his, part 'of the contractual obligation with the stock exchanges within two days subsequent' to the transaction' date. "The A.O. rejected the said explanation holding that the sums sought to be written off have never been taken into account for computing the income of the assessee, further, the amount is not allowable as business loss either. 5. By the impugned order, CIT(A) allowed assessee's claim after having following observation:- 6.2 I have considered the matter and as per record, the said issue has been held in favour of the appellant in the earlier years. To quote from the for A.Y, 2007-08: "I have gone through the issue. The Hon'ble ITAT* Special Bench's decision in the case of Shreyas Morakhia ITA No. 3374/Mum -4 for A.Y. 1998-99 order dated 16.07.2010 is in favour of the appellant. The Hon'ble ITAT Special Bench has also held as follows:- 32. Keeping in view all the facts of the case and the legal position emanating from the various judicia....
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....n'ble ITAT has allowed the claim in favour of the appellant. Also, similar issue has been allowed by the CIT(A) in A.Y. 2007 -08 to A.Y. 2010-11. Following the earlier years' Orders, including that of the jurisdictional ITAT in the case of the appellant, this ground is held in favour of the appellant. It is held that VSAT is entitled to depreciation at 60%. 9. CIT(A) has relied upon his order for A.Y.2007-08 to A.Y.2010-11. The issue is covered in favour of assessee vide orders of the Hon'ble Tribunal in assessee's own case for A.Ys. 2007-08 in ITA No.168/Mum/2011 dated 21/01/2015 and A.Y.2008-09 to 2010-11 in ITA No.4581/Mum/2012, 7328/Mum/2011 and 6204/Mum/2013 dated 19/02/2016. Respectfully following the decision of the Tribunal in assessee's own case, we do not find any infirmity in the order of CIT(A). 10. With regard to deleting the addition of Rs. 2,60,86,082/-, the assessee had incurred net loss on account of Vanda transaction, amounting to Rs. 2,60,86,982/-. According to the assessee, such loss incurred when the clients disowned the transaction undertaken by the Broker. This occurred when there might be trade errors while executing the orders by the Broker or....
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....re host of Court decisions wherein it is a settled issue that in the case of mercantile system of accounting all foreseeable losses must be allowed as deduction. This is also in accordance with the Accounting Standard notified u/ s. 145 of the Income tax Act which is obligatory on part of the assessee to follow in order to compute the total income. f. The appellant relies on the following decisions ;- CIT v. Woodward Governor India P. Ltd. 312 ITR 254 (SC) Rotork Control India P. Ltd. vs. CIT (2009) 314 ITR 62 DCIT vs. Bank of Bahrain I.T.No. 4404 & 1883/Mum/2004. 9.3. The appellant further submitted that the said losses' has been incurred in the course of the business of trading in shares wherein it hedges position in the 'cash segment with that in the futures segment. Accordingly, these losses would also not be considered as speculative in nature since hedging is specifically excluded from the ambit of the definition of "speculative transaction" vide section 43(5)(d). 13.1. The assessee further stated that both the decisions relied on by the A.O. has been dealt with by the Delhi High Court decision in the case of Woodward (s....
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....e AO to allow depreciation claim of Rs. 54,06,776/-. The observation of CIT(A) is as under:- I have very carefully considered the matter. I find in the case of India Capital Markets (P) Ltd. vs. DCIT 56 SOT 32, the Hon'ble Mumbai ITAT had considered a similar matter. In the said case, the assessee, a share broker had purchased entire retail clientele business of a company for a certain consideration. The assessee therein booked these expenses as purchase of goodwill and claimed depreciation therein under. s. 32(1)(ii). It was held that the purchase of clientele business was a right which could be used as a tool to carry on business and therefore eligible for depreciation on the payments made, since it falls within the expression "any other business or commercial rights of similar matter" used in section 32(1)(ii) of the Income Tax Act, 1961. The facts in the case of the appellant being similar to the facts of the above cited case, the A.O. is directed to allow depreciation on the acquisition of customer rights. The depreciation claim of Rs. 54,06,776/- is accordingly allowed. 18. We have considered rival contentions. AO relied on his order for A.Y.2007-08. The issue....