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TMI Blog2012 (10) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... lly and exclusively for the purpose of business. Therefore same cannot be treated as a business loss u/s 28. Decision in favour of revenue Disallowance of advance written-off u/s 28 – Assessee has given only a general explanation that the amount was advanced to party for doing some business, which did not fructify – Held that:- As neither the year of advance nor the purpose of advance is known. The burden of adducing requisite evidence in claiming an expenditure or loss to the deductible is on the assessee. This burden has not been discharged merely by general explanation. Therefore assessee has not proved the admissibility of this amount. Appeal decide in favour of revenue Disallowance of speculative loss from derivatives u/s 28 – Whether deeming provision of Sec. 43(5)(d) can be carried forward to section 73 regarding “loss in speculation business" – Held that:- As per provision of Sec 43(5)(d) deems transactions in derivatives at recognized stock exchanges not to be speculative transactions. It is applicable only in respect of such trading in derivatives and not in respect of any other goods, articles or things. Such transactions in the derivatives were taken out of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Aggarwal, has not been taken in the account in computing the income of this year or any earlier year. The amount does not represent money lent in the ordinary course of business of money lending. Therefore, it is not allowable u/s 36(1)(vii). The finding of the Ld. CIT(A) is that the claim is correct only to the extent that Shri G.P. Aggarwal used to be given advances at regular intervals. He used to submit bills or vouchers after incurring the expenditure. However, the situation took a different turn in financial year 1999-00 , when a sum of Rs. 2,72,922/- was made available to him without any business purpose and without insisting upon him to submit before the bills, vouchers or account statement. Therefore, the claim that the advance was made for business purpose has not been substantiated by any document. Thus, the claim has been denied. 3. Before us, the Ld. Counsel submits that the assessee - company had employed Shri G.P. Aggarwal as a technical and marketing personnel. He was also an employee - director in the assessee company. He was given advances from time to time and a sum of Rs. 5,82,802/- was found outstanding against his name. He suddenly left his employment as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Ld. CIT(A) in written submissions filed on 15.2.2011. However, when the Ld. CIT(A) probed the matter further by calling for accounts, it was submitted that this amount represents the written down value of the car given to Shri G.P. Aggarwal used by him for the purpose of business. He did not return this car when he left his employment in November, 1999. The specific query was raised by us whether depreciation was claimed by the assessee-company on this car. It was submitted that the depreciation was claimed and only the written down value of Rs. 3,66,714/- was written off. It is his claim that since this asset could not be recovered from the ex- employee, the amount represents business loss. His attention was drawn towards the provisions contained in section 43(6), which defines the term written down value . In the case of a block up assets, the written down value of a block of assets has to be reduced by the moneys receivable in respect of the asset from the value of block of asset, which is sold discarded demolish or destroyed. In other words, in case of a depreciable asset falling within a block up assets, any loss occurring on account of loss of the asset has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessee. This burden has not been discharged . Therefore, even without going into any case law, it is clear from the facts that the assessee has not proved the admissibility of this amount. Consequently it is held the assessee is not entitled to deduct this amount in computing the total income. Thus ground No. 2 (c) is dismissed. 6. In the result ground No. 2 is partly allowed. 7. Ground No. 3 is in regard to the treatment meted to the loss of Rs. 85,398/- incurred in trading in futures and options segment. The AO had not considered this issue in the assessment order. However, the Ld. CIT(A) called for the explanation. It was submitted that the loss was incurred in trading in futures, which does not constitute speculation loss. The Ld. CIT(A) came to the conclusion that the provision of section 43(5) is general in nature, which will not override the provision contained in section 73. Thus the loss was held to be speculation loss which was not allowed to be set off against the business income. 7.1 Before us, the Ld. Counsel relied on the amendment made to section 43(5) by Finance Act, 2005, w.e.f. 1.4.2006, which inserted clause (d) in the provision. Under the amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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