9911796707
TMI Blog2019 (11) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... und of appeal Whether on facts and in law, under the circumstances of the case the Ld. CIT(A)-16, Mumbai was justified in allowing loss on account of mark to market to the tune of Rs. 3,69,12,973/- without appreciating that the case laws relied upon in allowing this loss has been appealed against before the Hon'ble Bombay High Court. 3. Briefly stated, the facts of the case are that the assessee-company filed its return of income for the A.Y. 2012-13 on 29.11.2012 declaring total income of Rs. 35,43,40,796/-. Subsequently, it filed a revised return on 31.03.2014 declaring total income of Rs. 32,38,18,010/-. The assessee is a limited company engaged in the business of trading, settlement and other activities of commodities exchanges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime of settlement of the contract at a future date. Further, it is observed by him that the future contracts are in the nature of ready forward contracts and in such type of contracts, the profit or loss cannot accrue until and unless the contracts are settled. The AO thus disallowed Rs. 3,69,12,973/- treating as notional loss. 4. In appeal, the ld. CIT(A) following the decision in Edelweiss Securities Limited v. Addl. CIT [ITA 2193/MUM/2009], DCIT v. ECL Finance Limited [ITA 7656/Mum/2011], DCIT V. Edelweiss Securities Limited [ITA 7792/Mum/2012], DCIT v. Edelweiss Securities Limited [ITA 5939/Mum/2011], Edelweiss Capital Limited v. ITO [ITA 5324/Mum/2007], deleted the addition of Rs. 3,69,12,973/- made by the AO. 5. Before us, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounts is that it has to be valued on the cost basis or at the market value basis if the market value of the stock is less than the cost value. It was also expounded that the established and well settled practice in this regard should not be disturbed. Similar view was expressed by the Hon'ble Apex Court in the case of CIT vs. Woodward Governor 294 ITR 451 (SC). In this decision, the Hon'ble Apex Court has held that the accounts and the accounting method followed by an assessee continuously for a given period of time needs to be presumed to be correct till the Assessing Officer comes to the conclusion for reasons to be given that the system does not reflect true and correct profits. In the said case, the Hon'ble Apex Court has held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er relying on the decision of CIT v/s Jubiliant Enterprises Limited and Aditya Birla Finance Ltd. v/s ACIT, wherein appeals against the relied upon decisions are pending before the Hon'ble Bombay High Court. 8. In the assessment order, the AO determined the disallowance u/s. 14A r.w. Rule 8D of the Income Tax Rules, 1962(the Rules) at Rs. 19,60,69,838/-. As the assessee had made a suo-motu disallowance of Rs. 2,28,809/-, the AO brought to tax the differential amount of Rs. 19,58,41,069/-. 9. In appeal, the ld. CIT(A) followed the order of the ITAT in the case of the holding company of the assessee namely M/s. Edleweiss Financial Services Limited [ITA No. 4329/Mum/2014] wherein it has been held that for computing the disallowance und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (ii) of sub-rule (2) of rule 8D, prior to its amendment w.e.f 02.06.2016, amount of expenditure by way of interest would be interest paid by assessee on borrowings minus taxable interest earned during financial year. Similar view has been taken by the Hon'ble Bombay High Court in Jubiliant Enterprises Limited (supra), which has been followed by the Tribunal in the case of M/s. Aditya Birla Finance Limited (supra). Facts being identical, we follow the above decisions and confirm the order of the ld. CIT(A). Thus, the 2nd ground of appeal is dismissed. 12. The 3rd ground of appeal Whether on facts and in law, under the circumstances of the case the Ld. CIT(A)-16, Mumbai, was justified in deleting the addition made to Book Profit c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
