TaxTMI 
TaxTMI 
2014 (7) TMI 1363
X X X X Extracts X X X X
X X X X Extracts X X X X
....he outset, it is noticed that this appeal of revenue is barred by limitation by 05 days and revenue has filed condonation petition along with affidavit. Ld. Sr. DR argued that there is reasonable cause for the delay and this is a very small delay of only 05 days. When this was confronted to Ld. Counsel, he fairly conceded that the delay can be condoned and the appeal can be admitted. Hence, we condone the delay and admit the appeal for hearing. 3. The first issue in this appeal of revenue is against the order of CIT(A) deleting the addition made by AO on account of disallowance of loss from purchase and sale of shares holding the same as speculative loss. For this, revenue has raised following ground no.1: "1. That, on the facts and in c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rdingly, he treated the loss claimed by the assessee at Rs.4,70,68,846/- as speculation loss and added to the returned income of the assessee. Similarly, the AO also disallowed the expenditure incurred directly or indirectly in the context of business of purchase and sale of shares and treated the same as speculation business loss to the extent of a sum of Rs.35,62,078/- and Rs.3,97,640/-. Thereby the total speculation income treated by assessee and added to the returned income at Rs.5,10,28,564/-. Aggrieved, assessee preferred appeal before CIT(A) who after considering the submissions of the assessee noted that it is engaged in the business of share trading and derivatives transactions and also carrying on investment activity. 5. He noted....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d as speculation loss." He relying on the decision of ITAT Mumbai Special Bench in the case of ACIT Vs. Concord Commercials (P) Ltd. (2005) 95 ITD 117 (SB) noted that it is not the case of the AO that the assessee company is either a company controlled by business house or the loss on sale of shares are regarded to reduce taxable income. Further, he noted that the deployment of fund and gross earning i.e. 89% fund having been deployed in investment in shares as against only 0.07% in stock of shares or sales or purchases. Even the gross income at Rs.0,92,93,094/- and out of which specified income will be Rs.5,50,31,864/- which is more than half. He computed that interest on loan at Rs.4,03,28,324/-, dividend income at Rs.24,11,255/- and mi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5,50,31,863/- 35.20% (c) Business Income Derivative Transactions Rs.5,42,61,231/- 34.70% Rs.15,63,61,940/- From the above position, it is clear that the deployment of funds is more in the business of money lending from where the interest was earned and further the income as noted above is also from sources other than share transactions. Hence, we find no reasons to interfere in the order of the CIT(A) and same is confirmed. 7. The next issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance made by AO by applying Rule 8D(2) of the I. T. Rules, 1962 read with section 14A of the Act for expenses incurred for earning exempt income. For this, revenue has r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee has not maintained any separate details regarding management, establishment, administrative and other expenses viz-a-viz voluminous investments from where it is earning exempted income. When this was confronted assessee's counsel stated that he surrendering 10% of dividend income for addition. But the AO made disallowance in term of Rule 8D of the Rules at Rs.23,80,398/-. Aggrieved, assessee preferred appeal before CIT(A) who after considering the submissions of the assessee deleted the disallowance at Rs.18,13,375/- and retained the disallowance at Rs.5,67,035/- by observing as under: "After carefully going through the submission of the appellant along with the case laws relied upon, perusing the entire facts of the case including ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the above discussed legal and factua1 position, the disallowance of Rs. 18,13,375/- made by the A.O is deleted." Aggrieved, now revenue is in appeal before us. 9. We have heard rival submissions and gone through facts and circumstances of case. We find that assessee has not spent any amount on interest on borrowing as at 01-04-2008 and borrowing taken this year was not utilized in investment. Assessee has earned big income from derivative transactions at Rs.5,42,61,231/- and suffered loss on investment at Rs.1,22,81,662/- i.e. total expenses claimed are only Rs.1,42,48,311/-. Dividend income being only 1.5% of gross income Rs.2,13,724/- being l.5% of expenses can be attributed to dividend against which the company has offered Rs.241,12....