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TMI Blog2015 (1) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... – Decided against revenue. Loss incurred on future and option – Losses speculative in nature or not u/s 43(5)(d) – Held that:- In CIT Versus Nasa Finelease P. Ltd. [2013 (9) TMI 733 - DELHI HIGH COURT] it has been rightly held that the transactions in derivatives on recognized stock exchange not as deemed speculative - the transaction carried in future and options (derivatives) are outside the purview of “speculation loss” in terms of amendment made by the Finance Act, 2005 with effect from 1.4.2006 by inserting Clause (d) to the proviso to subsection (5) of Section 43 of the Act defining the meaning of “Speculation Transaction” - the dealing in derivatives was a regular business and it is not that the assessee has been incurring losses always, as in the immediately succeeding AY 2009-10, the assessee has earned a profit on trading in future and options (derivatives) - Decided against revenue. Claim of expenses u/s 57(iii) – Expenses made wholly 80,00,000/- from other sources – thus, the order of the CIT(A) is upheld – Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ss income. He submitted further that on building worth ₹ 35.9 crores earning of rent of ₹ 14.17 crore appears to be disproportionate to the value of the property. He argued, further, that the assessee has not claimed deduction on account of municipal taxes, salary and personal administrative charges. He also placed reliance of decision of the Hon'ble Gujarat High Court in the case of Messers Neha Builders Vs. CIT, 226 ITR 661 holding that where assessee is engaged in business of development, construction, sale and lease of movable property, the same is business and not rental income. Ld. Sr. DR also placed reliance on decision of Hon'ble Supreme Court in the case of Mc. Dowell and Company Ltd. Vs. CTO 154 ITR 148(SC). 6. Ld. AR on the other hand tried to justify the first appellate order with the submission that the facts in the case of M/s Neha Builder Vs. CIT (Supra) were different hence it is not relevant in the present case. He submitted further that under similar facts the AO in the case of present assessee in the assessment year 2007-08 in the assessment framed u/s 143(3) of the Act has accepted the claimed rental income from house property. Similarly, in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Tribunal hold that there was cessation of business and the department was right in its conclusion that income was taxable under the head "income from house property". The Hon'ble High Court approved the decision of the Tribunal. 8. Under almost similar facts in the case of ACIT Vs. Messers Atri Partners (Supra) an identical issue has been decided by the Tribunal in favour of the assessee. We, thus, find that there is no infirmity in the First Appellate Order accepting the claimed income as income from the house property and the claimed deduction u/s 24(1) of the Act. The same is upheld. The issue no. (A) is thus decided in favour of the assessee. 9. Issue no. (B) : At the outset of hearing the Ld. AR pointed out that issue raised is squarely covered by the decision of Honble Delhi High Court in the case of CIT Vs. NASA Finelease (P) Ltd. (2013) 358 ITR 305 (Del). 10. The Ld. Sr. DR supported the assessment order on the issue. 11. The facts in brief are that the assessee had claimed a loss on future and option (derivatives) amounting to ₹ 1,73,92,002/- which was set of with the profit of shares of branch at ₹ 1,88,32,896/-. The AO held that the loss on future a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of Clause (d) of proviso to section 43(5) of the Act. Under these background, we are of the view that the Ld. CIT(A) has rightly deleted the disallowance of the claimed loss of ₹ 1,73,92,002. The issue no. B is, thus, decided in favour of the assessee. In the result the appeal is dismissed. ITA No. 695/Del/2013 (A.Y. 2009-10) 13. The revenue has questioned first appellate order on the following grounds : "1. The CIT(A) has erred in deleting the addition of ₹ 4,51,32,184/- made by the AO by treating rental income as business income. 2. The CIT(A) has erred in directing the AO to assess rental income under the head 'Income from House property' without appreciating the fact that assessee is engaged in the business of building & letting out of commercial complexes. 3. The CIT(A) has erred in deleting the disallowance of ₹ 1,20,000/- out of total addition of ₹ 7,76,200/- claimed u/s 57(iii) of the IT Act without appreciating the fact that the assessee could not prove that such expenditure was expended wholly & exclusively for the purpose of earning such income. 4. The order of the CIT(A) is erroneous and is not tenable on facts and in la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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