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TMI Blog2015 (6) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... efore we do not find any error or illegality in the order of the Ld. CIT(A) in allowing the correct figure of donation paid by the assessee in the revised return of income. - Decided against revenue. Disallowance of bad debts - Held that:- The relevant finding of the AO and submitted that the Board of Directors of the assessee has approved the bad debts in the meeting held on 30.04.07, therefore the resolution is subsequent to the financial year closed on 31.03.07. We further note that the amount of bad debts written off represents the loan in the ordinary course of business of money lending which is carried on by the assessee, therefore when the interest on the said amount is offered to tax, then in view of the judgment of Hon’ble Jurisdictional High Court in the case of “CIT vs. Shreyas S. Morakhia” [2012 (3) TMI 103 - BOMBAY HIGH COURT] the same is allowable as business loss. Accordingly, we do not find any merits in the grounds raised by the Revenue when the bad debts were actually written off by the assessee being unrecoverable and it is regarding the advance given by the assessee in the business of money lending. - Decided against revenue. Disallowance of loss of commod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SHRI VIJAY PAL RAO, JJ. For the Appellant : Shri Vijay Mehta Ashit Mehta, A.R. For the Respondent : Shri Love Kumar, D.R. ORDER Per Vijay Pal Rao, Judicial Member: This appeal by the Revenue is directed against the order dated 22.02.2012 of the CIT(A) for the assessment year 2007-08. The Revenue has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in deleting the addition of 59,095/-, made on account of disallowance of STT payment, on the basis of revised return filed by the assessee, without appreciating that the revised return was filed by the assessee beyond the time limit prescribed u/s. 139(5) as such the revised return filed is invalid. 2. On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in deleting the addition of 28,500/-, made on account of disallowance of excess donation paid, on the basis of revised return filed by the assessee, without appreciating that the revised return was filed by the assessee beyond the time limit prescribed u/s. 139(5) as such the revised return filed is invalid. 3. On the facts and in the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction of correct amount of STT paid by the assessee in the revised return of income. The Assessing Officer (AO) has rejected the claim of the assessee on the ground that the revised return filed by the assessee is beyond the time limit prescribed under section 139(5). On appeal, the Ld. CIT(A) has accepted the correct amount of STT as given by the assessee in the revised return of income and therefore given the relief to the assessee to the tune of ₹ 59,095/-. 3. We have heard the Ld. D.R. as well as the Ld. A.R. and considered the relevant material on record. The AO has disallowed the relief to the assessee only on the technical ground of delay in filing the revised return. It is pertinent to note that the AO has to assess the correct income of the assessee on the basis of the provisions of the Act and in case if the assessee inadvertently has offered the higher income the same cannot be taxed by taking the excuse of technicalities. Even otherwise there is no restriction on the jurisdiction and the power of appellate authority to consider a fresh plea in view of the judgment of Hon ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT [1998] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue when the bad debts were actually written off by the assessee being unrecoverable and it is regarding the advance given by the assessee in the business of money lending. 5. Ground No.4 is regarding the disallowance of loss of commodity futures by treating as speculation loss. We have heard the Ld. D.R. as well as the Ld. A.R. and considered the relevant material on record. The Ld. A.R. of the assessee has fairly conceded that this ground is covered against the assessee by the decision of this Tribunal dated 17.01.14 in the case of Varsha Corporation Ltd. vs. DCIT in ITA No.6534/M/2012. However, the Ld. A.R. has submitted that the quantification of the amount of loss is required to be verified because on the same principle some income of the assessee will also be treated as speculation income. At the outset, we find that an identical issue has been considered by the co-ordinate bench of the Tribunal in the case of Varsha Corporation Ltd. (supra) in para 11 to 13 as under: 11. We have given our thoughtful consideration to the submissions advanced at the hands of the learned counsel for the assessee as well as learned DR for the department. Admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval of the Forward Markets Commission established under the Forward Contracts (Regulation) Act, 1952 (74 of 1952) in respect of trading in derivatives and shall function in accordance with the guidelines or conditions laid down by the Forward Markets Commission; (ii) the recognized association shall ensure that the particulars of the client (including unique client identity number and P AN) are duly recorded and stored in its databases; (iii) the recognized association shall maintain a complete audit trail of all transactions (in respect of derivative market) for a period of seven years on its system; (iv) the recognized association shall ensure that transactions (in respect of derivative market) once registered in the system are not erased; (v) the recognized association shall ensure that the transactions (in respect of derivative market) once registered in the system are modified only in cases of genuine error and maintain data regarding all transactions (in respect of derivative market) registered in the system which have been modified and submit a monthly statement in Form No. 3BC to the Director General of Income-tax (Intelligence and Criminal Investigation), New Delhi wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then such benefit can be extended to assessee only in respect of assessment year 2014-2015 as the provisions of clause (e) of proviso to Section 43(5) are inserted by the Statute w.e.f. 1-4-2014. However, in the present case, the transactions done by the assessee relate to financial year 2008-09. For these transactions, there was no provisions in the statute to give the benefit to the assessee in respect of transactions of commodities, which are ultimately settled otherwise then by actual delivery or transfer of the commodity as per Section 43(5) of the Act. 12. The case relied upon by the assessee also do not support the case of the assessee. In case of ACIT Vs. Arnav Akshay Mehta (supra), the transactions relate to stock exchange of India, which is MCX stock exchange, which was notified on 22-5-2009 and the transactions were governed by clause (d) of the proviso to Section 43(5), which was inserted by the Finance Act, 2005 w.e.f. 1-4-2006. Therefore, for the transactions, which were under consideration in that case, were held to be not of speculative nature under the provisions of clause (d) of the proviso to Section 43(5) of the Act and the said case relates to assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of bad debts under normal provisions of the Act. In view of our findings on the ground No.3, this ground of the Revenue s appeal is dismissed. Even otherwise when the assessee has actually written off the bad debts in the books of account, then no adjustment can be made while computing the book profit under section 115JB as this amount does not represent any provision on account of bad debts. 8. Ground No.6 is regarding the disallowance of depreciation and boat expenses. The AO has disallowed the depreciation and expenses in respect of luxury boat owned by the assessee on the ground that the same are personal in nature. On appeal, the Ld. CIT(A) has allowed the claim of the assessee on the ground that the claim of the assessee was allowed in the earlier years as well as in the subsequent years and therefore the same are to be allowed as business expenditure. 9. We have heard the Ld. D.R. as well as the Ld. A.R. and considered the relevant material on record. At the outset, we note that the claim of the assessee regarding depreciation and expenses on the boat has been allowed by the AO in the earlier year i.e. A.Y. 2006-07 while passing the assessment order under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s should not be disallowed. In response, the assessee vide its letter dated 26.10.09 stated that the transaction has been settled by actual delivery and therefore it does not fall within the ambit of speculation transaction. The AO held that even in the case of actual delivery based transaction if the company has indulged in the share trading activity it will be observed as speculation activity and loss from such activity is speculative loss as per the provisions of explanation to section 73 and therefore the same cannot be set off against the non speculative business profit which was disclosed by the assessee of ₹ 2,14,93,920/-. 11. Before the Ld. CIT(A), the assessee has contended that the assessee falls under the exception provided under explanation to section 73 because the gross total income of the assessee is mainly of head of the income from other sources. The Ld. CIT(A) accepted the claim of the assessee and directed the AO to treat the applicant s claim as business loss and not as speculative loss. 12. Before us, the Ld. D.R. has referred to the finding of the AO and submitted that the AO has pointed out that the assessee has declared profit from business at &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from other sources is more than the income from Business or profession , then the said company will fall in the exceptions carved out under the explanation to section 73 and deeming fiction will not be applied to such company. The issue before us is in narrow compass as to whether the gross income of the assessee for the purpose of comparison with the income from other sources has to be computed after setting off of brought forward business losses and unabsorbed depreciation. The gross total income for the purpose of explanation to section 73 of the Act shall be the aggregate income prior to giving the setting off under chapter VI of the Act. The authorities below have not dealt with this issue to give an factual finding about the allowable business loss and unabsorbed depreciation as well as the legal point whether the gross total income under the head Business and profession has to be computed after giving effect to the setting off of brought forward business loss as well as brought forward unabsorbed depreciation for the purpose of arriving to a decision that the income from other sources is more than the income from business and profession. Therefore for the limited p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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