2017 (11) TMI 1804

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....ddition of Rs. 5,20,75,140/- made by assessing officer on account of Mark to Market Loss claimed by the assessee in derivative transactions without appreciating the fact that the loss claimed on the basis of value of derivative as on 31st March is merely a notional loss and the actual loss or the profit in respect of such derivative transactions would get crystallized only at the time of settlement of such transaction." On the facts and circumstances of the case and in law, the CIT(A) erred in excluding the stock-in-trade from the Total Investment to be considered for the purposes of computing disallowance in accordance with Rule 8D, without appreciating that the investment in stock in trade is nothing but Business Investment and that Ru....

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.... filed the present appeal before us. ISSUE NO. 1:- 4. Under this issue the revenue has challenged the deletion of the addition of Rs. 5,20,75,140/- made by AO on account of Mark to Market Loss claimed by the assessee in derivative transaction. The Ld. Representative of the revenue has argued that the loss claimed on the basis of the value derivative as on 31st March is merely a notional loss and the actual loss or the profit of such derivative transaction would be crystallized only at the time of settlement of such transaction, therefore, the finding of the CIT(A) on this issue is wrong against law and facts and is liable to be set aside. However, on the other hand, the Ld. Representative of the assessee has strongly relied upon the f....

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....le. 5.1.2 I find that this is covered issue in favour of the appellant in jurisdictional Mumbai ITAT in the following cases relied upon by the appellant: 1. Edelweiss Capital Limited Vs. ITO (ITA. No.5324/M/2007) 2. Edelweiss Securities Limited Vs. Addll. CIT(ITA 2193/M/2009) 3. DCIT Vs. Edelweiss Securities Limited(ITA 7792/M/2012) 4. DCIT Vs. ECL Finance Limited (ITA 7656/M/2011) 5. DCIT Vs. Kotak Mahindra Investment Limited(ITA 1502/M/2012 6. Shri Ramesh Kumar Damani Vs. Addll. CIT (ITA 809/M/2009) 7. M/s Ekansha Enterprises P. Ltd. Vs. DCIT (ITA 809/M/2012) 8. ACIT Vs. Suryakant D. Nissar (ITA 2750/M/2010) 9. DCIT Vs. Edelweiss Securities Limited (....

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....him vide its letter dated 04.10.2013. The appellant has essentially taken the same arguments before the assessing officer as. in its contentions above. Hence detailed mention of the same is not made here. 5.2.2 The appellant company is mainly engaged in the business of share trading activity. During the year under consideration, the appellants have earned exempt income of Rs. 36,61416/- in the form of dividend on shares/ME/debentures held as stock in trade and claimed the same to be exempt under section 10(34). This fact is admitted by the assessing officer at para 54 of his order. He has rejected contention of the appellant that dividend on shares etc., held as stock in trade cannot be subjected to disallowance u/s 14A and has ign....