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TMI Blog2013 (9) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. The Learned CIT(A) is erred in not considering the proportionate expenses of Rs.2,82,873/- out of the expenses capitalized in the assessment year 2004-05." 2. Apropos Ground No.1, the activity of the assessee regarding sale and purchase of shares was considered as speculative activity in respect of assessment year 2007-08 vide assessment order passed under section 143(3) of the Income Tax Act,1961(the Act), copy of which is placed at pages 1 to 5 of the paper book. Accordingly speculation loss was computed at Rs.43,72,246/- and it was ordered to be carried forward to the next year. For the year under consideration the assessee earned profit on sale and purchase of shares amounting to Rs.33,97,223/- and the same was adjusted against s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be set off in the year under consideration against the profit from similar activity. 4. On the other hand, it was submitted by Ld. Dr that in the year under consideration no speculative income has been assessed by the AO, therefore, set off of brought forward speculative loss cannot be allowed to the assessee. 5. We have heard both the parties and their contentions have carefully been considered. According to the provisions of the Act brought forward speculative loss can be adjusted against speculative profit only. The AO in the computation of income has not determined the profit arising out of activity of sale and purchase of shares as speculative profit. It is the case of the assessee that similar activity was treated to be speculat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 and after determining this fact the AO will determine that whether such activity is speculative in nature. If such activity is speculative in nature then set off of earlier determined speculative loss is to be granted to the assessee. With these observations we restore this issue to the file of AO and this ground of the assessee is considered to be allowed for statistical purposes. 6. Apropos the issue raised in Ground No.2, it is the case of the assessee that during the assessment proceedings for A.Y 2004-05 certain expenses which was claimed by the assessee as revenue expenditure were treated to be capital expenditure and they were held to be allowable on proportionate basis on the basis of area of sale of flats. For better under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the assessee to which it is not entitled to claim in view of the above discussion. However, during the year, the assessee has sold flats also whose income has been offered for taxation on proportionate basis during the year. The total area of flats sold is 2855 Sq.ft. out of the total constructed area of 19985 Sq. ft. Hence only a proportionate basis comes to Rs. 34,83,547/-. 4.15 Hence, an amount of Rs.34,83,547/- is added to the total income of the assessee." Accordingly disallowance was made of Rs.34,83,547/-. A copy of assessment order is filed at pages 6 to 15 of the paper book. 7. Similar treatment was given by the revenue to these expenditure in respect of assessment year 2005-06, wherein following the earlier pattern pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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