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2017 (10) TMI 478 - ITAT AHMEDABADNature of loss - ‘business loss’ OR ‘capital loss’ - CIT(A) granted relief to the assessee and treated the loss arising of securities as business loss as per the claim of the assessee - Held that:- It is the case of the assessee that the impugned loss arose on sale of securities and bonds emanated from investments which were sub-classified under ‘available for sale’ (AFS) category at the time of purchase. In view of the aforesaid facts, we find merit in the claim of the assessee that the loss arising on sale of securities/bonds are of trading nature notwithstanding the fact that the securities were grouped under the head ‘investment’ owing to the prescribed format of the RBI. We find that the order of the CIT(A) dealing with the issue is consistent with the CBDT instruction as well as the facts of the case and does not require any elaboration. Accordingly, we decline to interfere with the order of the CIT(A). - Decided against revenue Allowable business expenditure - Disallowance of construction of statue of Shri Sardar Patel at a circle in the town where the assessee is situated - Held that:- It is trite that ‘for the purpose of business’ contemplated under s.37 is wider in scope than the expression ‘for the purpose of earning profits’ and may comprehend many acts incidental to the carry on of a business. Thus, so long as the expenditure has been incurred on the grounds of commercial expediency and in order to directly or indirectly facilitate the carry of the business, the fact that there was no compelling necessity to incur the expenditure on which deduction is claimed is an irrelevant consideration. The expenditure in the instant case has gone irretrievably in the course of carrying on of business. The expenses incurred has potential to increase the visibility of the assessee in the public at large and thus has bearing on business acceleration. Therefore, we find considerable merit in the claim of the assessee. Consequently, claim of the assessee towards urban development expenditure allowed. Claim of amortization of securities premium - Held that:- We notice that this amount represents the excess of acquisition cost over the face value of Government securities taken under HTM category. We find that the issue is squarely covered in favour of assessee by the decision in the case of CIT vs. Rajkot Dist. Co-op Bank Ltd. in Tax Appeal [2014 (3) TMI 110 - GUJARAT HIGH COURT] as placed reliance upon the CBDT Circular No.17 of 2008 and held that loss on account of premium paid on the face value of the security is required to be amortized for the remaining period of maturity. Thus the claim of the assessee towards amortization of security premium requires to be accepted. Assessee appeal allowed.
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