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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 ..... ile of AO to bring all the facts on record and give a specific finding that where or not assessee's activity of sale and purchase of shares during the year remains same as it was in respect of assessment year 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 the issue was restored to the file of AO. 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 had not determined the profit arising out of activity of sale and pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 speculation loss of Rs.43,72,246/- determined and carried forward in respect of A.Y 2007-08. Considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 speculative activity in the immediate preceding year, therefore, different treatment for the year under consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 understanding of the facts the observations of Ld. AO from the assessment order dated 28/8/2008 in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Under the Companies Act, 1956) 38,612 Nil 38,612 18 Insurance 55,593 Nil 55,593 19 Repairs Maintenance 30,336 Nil 30,336 20 Internal Auditor's Fees 8,100 Nil 8,100 21. Audito's Remuneration 20,800 Nil 20,800 22. Miscellaneous Expenditure 86,075 Nil 86,075 TOTAL 63,14,223 22,50,085 40,64,138 4.14. Thus, the expenditure to the extent of Rs.40,64,138/- has been claimed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and paid the tax due on the same. The issue is now settled. On verification the contention of the assessee is found correct." 8. It was submitted by Ld. AR that following the aforementioned pattern a sum of Rs.2,82,872/- was claimed and this claim of the assessee has been rejected. 9. On the other hand, Ld. DR relied upon the order passed by Ld. CIT(A). 10. We have carefully considered the rival submissions in the light of the material palced before us. The relevant observation of AO on this issue in respect of assessment years 2004-05 and 2005-06 from respective assessment orders have already been reproduced. The department cannot take different stand on the year under consideration as principle of consistency has to be followed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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