TaxTMI 
TaxTMI 
2018 (10) TMI 1115
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.... Loss Account filed along with the said return, a sum of Rs. 3,23,969/- was debited by the assessee on account of miscellaneous expenditure written off. In this regard, it was explained by the assessee during the course of assessment proceedings before the Assessing Officer that the said expenditure incurred on public issue expenses amounting to Rs. 3,22,419/- and preliminary expenses amounting to Rs. 1,550/- written off during the year under consideration was deductible under section 35D(2). It was submitted that the said expenditure was incurred before the commencement of its business by the assessee-company and the same was claimed for deduction to the extent of 1/10th in each of the ten consecutive previous years including the year under consideration. The nature of such expenditure aggregating to Rs. 32,24,172/- as claimed by the assessee-company was also explained before the Assessing Officer and it was contended that the same was deductible under section 35D to the extent of 1/10th during the year under consideration, as the new business activity was commenced by the assessee during the financial year 1995-96. This claim of the assessee was not found acceptable by the Assess....
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.... 5. I have heard the arguments of both the sides on this issue and also perused the relevant material available on record. It is observed that amortisation of certain preliminary expenses is allowed as per section 35D(1)(i), where an assessee being an Indian Company incurs after 31st March, 1970 any expenditure specified in sub-section (2) before the commencement of its business. In the present case, there is no dispute that the expenditure in question claimed by the assessee was in the nature as specified in sub-section (2) of section 35D. The ld. Counsel for the assessee has also contended that the deduction is being claimed by the assessee under clause (i) of sub-section (1) of section 35D and not Clause (ii) thereof as the expenditure in question was incurred by the assessee-company before commencement of its transportation business. In this regard, he has invited my attention to the Profit & Loss Account of the assessee-company for the financial year 1995-96 as placed at pages no. 5 & 8 of the paper book to show that the income from freight having been received by the assessee-company from its operation for the first time in the financial year 1995-96, the business had commen....
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.... made by the assessee in support of its case on this issue was not found acceptable by the ld. CIT(Appeals), he confirmed the action of the Assessing Officer in rejecting the claim of the assessee for set off of speculation loss against the share trading profit for the following reasons given in his impugned order: "The issue here is whether profit of Rs. 28,90,809/- earned by the assessee only delivery based share transactions can be treated as speculative profit or not In this case, the assessee had made a speculative loss of Rs. 6,49,330/- on share transactions which were settled otherwise than by delivery. The said loss was treated as speculative loss by the AO/ There is no dispute on this point and the assessee also admits the same as speculative loss. However, the AO treated the profit on delivery based share transaction as non-speculative profit. The assessee, on the other hand, treated the same as speculative in nature in terms of the provisions of Explanation to section 73. The AO did not allow the set off of the speculative loss Rs. 6,49,330/- against the profit on delivery based transactions of Rs. 28,90,809/- treating them as normal business income. The dispute, there....
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....vidend income being Rs. 5,73,701/- is lesser. If the said principle is applied in the facts of the present case, I find that the gross total income of the assessee would not consist mainly of income, which is chargeable under the head "capital gains" as its business income could be more than income from capital gains and the profit from the purchase and sale of shares could be deemed to be a speculation profit as per Explanation to section 73. Consequently the assessee would be entitled to set off this speculation loss from the said profit as per section 73 as rightly claimed by it. I, therefore, allow the claim of the assessee for such set off and allow Ground No. 2 of the assessee's appeal for A.Y. 2005-06. 9. Now we shall take up the appeal of the assessee for A.Y. 2010-11 being ITA No. 1025/KOL/2016, which involves a solitary issue relating to the disallowance of Rs. 11,46,263/- made by the Assessing Officer under section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962, which is confirmed by the ld. CIT(Appeals). 10. During the previous year relevant to the Assessment Year 2010-11, the assessee-company had earned dividend income of Rs. 10,02,821/- which was cla....
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....sallowance of Rs. 11,46,363/- was made by him under section 14A. 11. The disallowance made by the Assessing Officer of Rs. 11,46,363/- under section 14A was challenged by the assessee in the appeal filed before the ld. CIT(Appeals) and since the submissions made by the assessee in support of its case on this issue were not found acceptable by the ld. CIT(Appeals), he confirmed the said disallowance for the following reasons given in his impugned order:- "The grievance of the assessee is that while working disallowance as per Rule 80(2)(ii) the AO has taken the figure of interest at Rs. 28,61,176/- as against the figure purposed by them of Rs. 8,14,713/-. The difference in the interest figure comes on account of Interest on loan for purchase of vehicle of Rs. 20,46,463/*. It is the contention of the assessee that since the loan for purchase of vehicle was for acquiring trucks and tankers, which were subsequently used in the transportation business, the same should not be considered for the purposes of computing the disallowance u/s. 14A. In the assessment order the AO has recorded his satisfaction for invoking Rule 8D. The assesee had suomoto offered disallowance of Rs. 3,77,450/*....