9911796707
TMI Blog2012 (12) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... ares in their own name and there is no carried forward speculation losses to be set off. Profit from trading in shares in Assessee’s own name is to be treated as speculative profits - ground of appeal of the Assessee is treated as partly allowed. Trade credit accounts under sec 68 - Held that:- Assessee has to prove the identity of the creditors, genuineness of the transaction and capacity of the creditors. The onus is on the assessee to substantiate it’s claim and the assessee has not discharged the same. Accordingly, in the interest of justice The issue set aside to the file of the AO directing assessee to substantiate its claim - in favour of assessee for statistical purposes. Software expenses - Capital vs. Revenue expense - Held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h also appears to be the income returned by the Assessee. Thus by allocation of expenditure the Assessing officer has not altered the taxable income. However we find that this issue is covered by the order of the ITAT in Assessee s own case in ITA no 245/2001, 371,372/2002 for the AY 1997-98, 1998-99 and 1999-00 dt 8.5.2009, has directed that 5% of the expenditure be allocated against the income from trading in shares in the Assessee s own name (speculation income) and the balance against the brokerage business. 3. For the earlier years the ITAT had determined the allocation of expenditure between the brokerage business and trading in shares because the Assessee had incurred loss in trading of shares in their own name and hence the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance in trade credit accounts under sec 68. The AO had asked the Assessee to file confirmation letters in respect of sundry creditors with balances in excess of Rs. 1 lakh. The Assessee did not file confirmation letters in respect of 5 creditors and hence the AO added the total amount standing to the credit of these creditors amounting to Rs. 40,76,167/- as not genuine and added the same u/s 68 of the I.T.Act 1961. 6. On appeal before the CIT(A) the Assessee submitted as under: As regards Smt. Anju K. and Smt. Raeesa Kaleemuddin, it was submitted that the company could not obtain confirmation letters from Smt. Anju K. and Raeesa Kaleemuddin as they were out of India. Stating that the company could obtain now the confirmation lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on letter, it had come to light that the creditor and her husband have gone bankrupt and are not traceable, the company was unable to obtain confirmation letter from her, the appellant requested that the addition made by the Assessing Officer may be deleted. 7. After considering the submissions of the assessee, the CIT(A) rejected the Assessee s claim observing as under: 11.1 I have carefully considered the submissions of the appellant and the facts of the case. However, I do not agree with the contention of the appellant. It has been contended that the company could not obtain the confirmation letters from Smt. Anju K. And Smt. Raeesa Kaleemuddin as they were out of India. I find that the questionnaire dated 20/12/2005 issued by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e obtained a confirmation from his legal heir for establishing the credit balance shown in his name. There was no difficulty in obtaining a confirmation in that regard when the appellant has been allowed nearly 3 months time. As regards the contention of filing confirmation letter from him in AY 2001-02 is concerned, it may be stated that proceedings for each assessment year is different and in absence of supporting evidence, it cannot be accepted that the same credit balance as shown in the AY 2001-02 was continuing in the current accounting year relevant to AY 2003-04. Similarly, in absence of any confirmation letter filed by the appellant from Smt. K. Rukmini, the credit balance shown against her name cannot be accepted. When the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and capacity of the creditors. The onus is on the assessee to substantiate it s claim and the assessee has not discharged the same. Accordingly, in the interest of justice, we set aside the issue to the file of the Assessing Officer and the assessee is directed to substantiate its claim before the Assessing Officer. The ground appeal of the Assessee on this issue is deemed to have been allowed for statistical purposes. 10. The next issue on appeal is regarding software expenses of Rs. 3,02,643/-. The Assessee claimed the same as revenue expenses while the AO and CIT(A) had held it to be capital expenses and allowed depreciation. It is the contention of the Assessee that in their line of business the changes made in the SEBI regulations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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