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TMI Blog2017 (12) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence, we restrict the disallowance at 1,51,348/- to the extent of exempt income. We direct the AO accordingly. Not allowing carry forward of speculation loss - Held that:- Admittedly, the assessee has claimed speculation loss in the return of income at 56,42,063/- but the AO himself has verified from the records that the speculation loss is at 1,04,65,899/-. According to us, the assessee is entitled for this loss and this has been verified by the AO from records. Accordingly, we direct the AO to allow the speculation loss at 1,04,65,899/-. The appeal of assessee is allowed and that of the Revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting addition made under Rule 8D(ii) of ₹ 50,08,589/- & under Rule 8D(iii) of ₹ 1,03,392/- of Sec.14A & directing AO to deduct the value of stock in trade for purposes of Rule 8D(iii) only & not for Rule 8D(ii)." 3. Briefly stated facts are that the assessee is engaged in trading of shares as well as stock broker. The AO during the course of assessment proceedings noticed that the assessee has earned exempt income i.e. the dividend income of ₹ 1,51,348/- and claim the same as exempt under section 10(38) of the Act. Accordingly, the AO computed the disallowance under section 14A read with Rule 8D(2)(ii) of Income Tax Rules, 1962 (hereinafter the 'Rules') at ₹ 50,08,589/- and also under Rule 8D(2)(iii) at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the outset, the learned Counsel for the assessee stated that the assessee's exempt income i.e. dividend income is to the tune of ₹ 1,51,348/-. According to him, the issue is squarely covered by the decision of Hon'ble Delhi High Court in the case of Joint Investment Pvt. Ltd. vs. CIT (2015) 372 ITR 694 (Delhi), wherein it is held that the window for disallowance was indicated in section 14A of the Act and was only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income. This proportion or portion of the exempt income surely cannot swallow the entire amount. In view of the above Delhi High Court decision, the learned Counsel for the assessee fairly conceded that the disallowance under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order at Para 6 which reads as under: - "6. For the year under consideration, the assessee company has claimed the following losses: AY 2009-10 Speculation Loss 56,42,063/- Business Loss 27,14,160/- Depreciation Loss 19,33,204/- AY 2010-11 Business Loss 6,45,656 The same has been duly verified from records and observed as under:- AY 2009-10 (Assessed Income / Loss vide order U/s 143(3) dated 15/12/2011) Speculation loss 1,04,65,899/- Business income 23,02,740/- AY 2010-11 (Assessed Income / Loss vide order u/s 143(3) dated 28/11/2013) Business Income 4,11,919/- Therefore, for the year under consideration, the assessee is eligible to claim speculation loss of ₹ 1,04,65,899/- for AY 2009-10. However, consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on merit and has harped upon mathematical error on computation of the amount of disallowance; this ground of appeal is Dismissed being pre-mature and jumping the procedure and without following the proper route for appeal. Had the appellant made out any case on merit, a final decision could have been taken here itself." 9. In view of the above, the learned Counsel for the assessee stated that the assessee is entitled for this loss and authorities below have admitted this but only mistaken occurred while filing the return of income by the assessee and in the return of income it was claimed of ₹ 56,42,063/- instead of the actual claim of ₹ 1,04,65,899/-. On the other hand, the learned Sr. Departmental Representative ('DR') ..... X X X X Extracts X X X X X X X X Extracts X X X X
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