Appeal details
Counselvise Citation
246619914 RSA 2008
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 4 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-08-2011
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
E
Next Hearing Date
10-08-2011
Assessment Year
2004-2005
Appeal Filed On
09-04-2008
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVAN, JM ITA NO.2011/MUM/2008 : ASST.YEAR 2004-2005 M/S.EMKAY SHARE & STOCK BROKERS LTD. 4D, 4 TH FLOOR, HAMAM HOUSE AMBALAL DOSHI MARG, FORT MUMBAI 400 023. PAN : AAACE0994L. VS. THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 4(1) MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.2466/MUM/2008 : ASST.YEAR 2004-2005 THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 4(1) MUMBAI. VS. M/S.EMKAY SHARE & STOCK BROKERS LTD. 4D, 4 TH FLOOR, HAMAM HOUSE AMBALAL DOSHI MARG, FORT MUMBAI 400 023. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI R.K.GUPTA ASSESSEE BY : SHRI SANJIV M.SHAH DATE OF HEARING : 10.08.2011 DATE OF PRONOUNCEMENT :12.08.2011 O R D E R PER R.S.SYAL, AM : THESE TWO CROSS APPEALS ONE BY THE A SSESSEE AND THE OTHER BY THE REVENUE ARISE OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 31.01.2008 IN RELATION TO THE ASSESSMENT YEAR 2004-2005. 2. FIRST GROUND OF THE ASSESSEES APPEAL IS AGAINST THE SUSTENANCE OF ADDITION OF RS.1,62,579 MADE BY THE ASSESSING OFFICER TOWARDS FINE PAID TO BSE / NSE. BRIEFLY STATED THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE, A SHARE AND STOCK BROKER, IS A MEMBER OF BSE / NSE CARRYING ON THE BUS INESS ACTIVITY IN SECONDARY AND PRIMARY MARKET. IT CLAIMED DEDUCTION OF RS.1,62,579 IN THE NATURE OF PENALTY / FINE LEVIED BY STOCK EXCHANGES. THE A. O. MADE THE DISALLOWANCE WHICH CAME TO BE UPHELD IN THE FIRST APPEAL. ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 2 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD IT IS NOTICED THAT IDENTICAL ISSUE CAME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2002-20 03. VIDE ORDER DATED 23.07.2008 IN ITA NO.438/MUM/2006 THIS MATTER HAS BEEN DECI DED IN ASSESSEES FAVOUR. SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN AS SESSMENT YEAR 2005-2006 IN ASSESSEES OWN CASE, A COPY OF WHICH ORDER HAS ALSO BEEN PLACED ON R ECORD. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY CONCED ED THAT THE FACTS A ND CIRCUMSTANCES OF THIS GROUND ARE MUTATIS MUTANDIS SIMILAR TO THOSE CONSID ERED AND DECIDED BY THE TRIBUNAL. RESPECTFULLY FOLLOWING THE PRECED ENTS, WE ORDER FOR THE DELETION OF THIS ADDITION. 4. GROUND NO.2 IS AGAINST THE SUSTENANCE OF ADDITION ON ACCOUNT OF BAD DEBTS. THE ASSESSEE MADE DEDUCTION OF RS.3, 46,318 TOWARDS BAD DEBTS WHICH WAS NOT ALLOWED BY THE ASSESSING OFFICER. THE SA ME VIEW WAS UPHELD BY THE LEARNED CIT(A). 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD WE FIND THAT IN PRINCIPLE THE QUES TION OF BAD DEBT IN THE HANDS OF STOCK BROKER STANDS SETTLED IN ASSESSEES FAVOUR BY THE JUDGEME NT OF THE HONBLE DELHI HIGH COURT IN CIT VS. D.B. (INDIA) SECURITIES [(2009) 318 ITR 26 (DELHI)] HOLDING THAT THE UNRECOVERED AMOUNT BY THE SHARE BROKER ON BEHALF OF ITS SUB-BROKER HAS TO BE TREATED AS DEBT AND DEDUC TION IS ALLOWABLE. IT HAS FURTHER BEEN LAID DOWN IN THIS CASE THAT THE SHARES REMAINING IN THE POSSESSION OF TH E ASSESSEE CAN BE SOLD IN THE MARKET FOR WHATEVER CONSIDERATION AND AD JUSTED AGAINST THE BALANCE OUTSTANDING PAYABLE BY THE DEBTORS AND THE NET FIGURE WHIC H RESULTS THEREAFTER, HAS TO BE ALLOWED AS BAD DEBT. THE SPECIAL BE NCH OF THE TRIBUNAL IN DCIT VS. SHREYAS S.MORAKHIA [(2010) 5 ITR (TRI.) 1 (MUM.) (SB)] HAS ALSO DECIDED THIS ISSUE IN ASSESSEES FAVOUR BY HOLDING THAT THE SUM RECEIVABLE BY SHAR E BROKER FROM CLIENTS FOR TRANSACTIONS UNDERTAKEN ON THEIR BEHALF IS A TRADING DEBT. UNRECOVERED PART HAS TO BE ALLOWED AS ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 3 DEDUCTION. IN VIEW OF THE ABOVE JUDGEMENT AND SPECIAL BENCH ORDER, WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION IN RESPECT OF THE AMOUNT BECOMING UNRECOVERABLE FROM ITS CLIENT S. HOWEVER THE DEDUCTION HAS TO BE RESTRICTED TO THE AMOUNT DETERMINED AFTER REDUCING THE SUM RECOVERABLE FROM SALE PROCEEDS OF SHARES WITH ASSESSEE, IF ANY, IN TERMS OF THE JUDGEMENT IN D.B. (INDIA) SECURITIES (SUPRA). WE, THEREFORE, SET ASIDE THE IMP UGNED ORDER ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF A.O. FOR TAKING A FR ESH DECISION ACCORDINGL Y, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 6. GROUND NO.3 IS AGAINST THE CONFIRMA TION OF DISALLOWANCE OF RS.5,98,965 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SOFTWARE EXPENSES. THE A.O. MADE THIS ADDITION WHICH CAME TO BE UPHELD IN THE FIRST APPEAL. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD IT IS NOTICED THAT THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF AMWAY INDIA ENTERPRISES VS. DCIT [( 2008) 111 ITD 112 (DEL.) (SB)] HAS DECIDED SIMILAR ISSUE RESTORING THE MATTER TO TH E FILE OF A.O. WITH THE DI RECTION TO DECIDE ABOUT THE DEDUCTIBILITY OR OTHERWISE OF SOFTWARE EXPENSES ON CERTAI N PARAMETERS LAID DOWN IN THAT CASE. SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2005-2006, COPY OF WHIC H HAS BEEN PLACED ON RECORD. FOLLOWING THE PRECEDENT, WE RESTORE THE MATTER TO THE FILE OF A.O. FOR TAKING A FRESH DECISION ON THIS ISSUE AFTER CONSIDERING THE MANDATE OF THE SPECIAL BENCH ORDER IN THE CASE OF AMWAY INDIA ENTERPRISES (SUPRA) AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. GROUND NO.4 IS AGAINST THE CONFIRMATION OF DISALLOWANCE U/S.14A, WHICH WAS NOT PRESSED BY THE LEARNED A.R. TH E SAME IS, THEREFORE, DISMISSED. ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 4 9. GROUND NO.5 OF THE ASSESSEES APPEAL IS AGAINST THE UPHOLDING OF ADDITION OF RS.5,93,641 TOWARDS SHARES WRITTEN OFF BY THE ASSESSEE. THE FA CTS APROPOS THIS GROUND ARE THAT THE ASSESSE E CLAIMED DEDUCTION OF RS .5,93,641 TOWARDS SHARES WRITTEN OFF. THE ASSESSING OFFICER OBSERVED THAT ALL THE COMPANIES OF WHICH THE SHARES HAVE BEEN WRITTEN OFF BY THE ASSESSEE, TABULATED AT PAGE 22 OF THE ASSESSMENT ORDER, WERE REPUTED COMPANIES HAVING VALUE OF THE SHARES. THE ASSESSEES CONTENTION THAT THE SHARE CERTIFICATES WERE LOST, WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER, AS IN HIS OPINION TH E ASSESSEE COULD HAVE OBTAINED DUPLICATE SHARE CERTIFICATES FROM THESE COMPANIES. HE , THEREFORE, MADE DISALLOWANCE FOR THE SAID SUM, WHICH CAME TO BE UP HELD IN THE FIRST APPEAL. 10. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD IT IS OBSERVED THAT THE ASSESSEE WAS HOL DING THESE SHARES AS ITS STOCK-IN- TRADE. THERE IS DIFFERENCE IN THE SHORTAGE OR LOSS IN THE TRADABLE COMMODITIES, CAPABLE OF DETERIORATION VIS--VIS THE LOSS OF SHARE CERTIFICATES. IF THE SHARE CERTIFICATES ARE LOST THE A SSESSEE COULD HAVE APPLIED FOR AND OBTAINED DUPLICATE SHARE CERTIFICATES. BE THAT AS IT MAY, THERE IS NO EVID ENCE WORTH THE NAME ON RECORD TO INDICATE THAT THERE WAS, IN FACT, AN LOSS OF SUCH SH ARES. ON A SPECIFIC QUERY, THE LEARNED A.R. SUBMITTED THAT NO FIR WAS LODGE D IN RESPECT OF LOSS OF SUCH SHARES AND FURTHER NO COMMUNICATION WAS MADE WITH THE COMPANIES IN RESPECT OF SUCH SHARES. UNDER SUCH CIRCUMSTAN CES WE HOLD THAT THE LEARNE D CIT(A) WAS JUSTIFIED IN SUSTAINING THE ADDITION BECAUSE THE PRELIM INARY FACT OF HAVING LOST THE SHARES CERTIFICATES WAS NOT PROVED. THIS GROUND IS NOT ALLOWED. 11. GROUND NOS.6 AND 8 OF THE ASSESSEE S APPEAL AND GROUND NO.2 OF THE REVENUES APPEAL DEAL WITH COMMON ISSUE. THE FACTS OF THESE GROUNDS ARE THAT THE ASSESSEE EARNED PROFIT IN SHARE TRADING AMOUNTING TO RS.1.54 CRORE WHICH WAS SET OFF AGAINST LOSS IN DERIVATIVES AMOUNTING TO RS.1.04 CRORE AND THE NET PROFIT OUT OF THIS TRANSACTION AMOUNTING TO RS.50. 38 LAKH WAS OFFERED FOR TAXATION. THE ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 5 ASSESSING OFFICER REFUSED TO ACCEPT THE ASSESSEES CONTENTION FOR TREATING SHARE TRADING PROFIT OF RS.1.54 CRORE AS SPECULATION UNDER EXPLANATION TO SECTION 73. HE, THEREFORE, DID NOT ALLOW LOSS IN DERIVATIVES OF RS.1.04 CRORE AGAINST SHARE TRADING PROFIT OF RS.1.54 CRORE. RESU LTANTLY THE LOSS OF RS.1.04 CR ORE WAS CONSIDERED AS LOSS INCURRED FROM SPECULATIVE TRANSACTI ON INCAPABLE OF ADJUSTMENT AGAINST NON- SPECULATION BUSINESS INCOME . WHEN THE MATTER CAME UP BE FORE THE LEARNED CIT(A), HE HELD THAT THE SHARE TRADI NG PROFIT OF RS.1.54 CRORE WAS LI ABLE TO BE CONSIDERED AS SPECULATION BUSINESS INCO ME AS COVERED UNDER EXPLANATION TO SECTION 73. THE LOSS FROM DERIVATIVE TRANSACTION WAS HELD TO BE NON-SPECULATION BUSINESS LOSS. BOTH SIDES ARE IN APPEAL WITH THEIR RESPECTIVE STANDS. 12. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD, WE FIND THAT THERE ARE TWO ISSUES WH ICH REQUIRE OUR ADJUDICATION. INSOFAR AS THE LOSS OF RS.1.04 CRORE ON DERIVATIVE TRADING IS CONCERNE D, THE ISSUE STANDS SETTLED BY THE SPECIAL BENCH ORDER IN THE CASE OF SHREE CAPITAL SERVICES VS. ACIT [(2009) 28 DTR (KOL) (TRIB.)] 1] HOLDING THAT BEFORE THE AMENDMENT BY WAY OF INSERTION OF CLAUSE (D) OF PROVISO TO SECTION 43(5), SUCH LOSS ON ACCOUNT OF TRANSACTION IN DERIVATIVES HAS TO BE CONSIDERED AS SPECULA TION LOSS. IT HAS FURT HER BEEN HELD THAT THE INSERTION OF CLAUSE (D) IS PROSPECTIVE AND APPLICABLE ONLY FROM ASSESSMENT YEAR 2006-2007. THE HONBLE JURISDICTIONAL HI GH COURT HAS APPROVED THIS VIEW IN CIT VS. BHARAT R. RUIA (HUF) [(2011) 54 DTR (BOM.) 153)] . IN THE LIGHT OF THE JUDGEMENT OF THE HONBLE JU RISDICTIONAL HIGH COURT, WE HOLD THAT THE LOSS OF RS.1.04 CRORE FROM DERIVATIVE TRANSACTION IS REQUIRED TO BE TREATED AS SPECULATION LOSS. THE IMPUGNED ORDER IS, TH EREFORE, REVERSED TO TH AT EXTENT. INSOFAR AS THE INCOME OF RS.1.54 CRORE IS CONCERNED, THE ASSESSEE CLAIMED IT TO BE SPECULATION INCOME COVERED UNDER EXPLANATION TO SECTION 73, WHICH THE ASSESSING OFFICER REFUSED TO ACCEPT. HE HELD SUCH AMO UNT TO BE NON-SPECULATION BUSINESS INCOME. THE LEARNED CIT(A) APPROVED THE VIEW TA KEN BY THE ASSESSEE ON THIS POINT AGAINST WHICH THE REVENUE IS AGGRIE VED THROUGH GROUND NO.2. ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 6 13. IT IS SEEN THAT IN ASSESSMENT YEAR 2003 -2004 THE ASSESSEE RAISED GROUND NO.2 BEFORE THE TRIBUNAL WHICH READS AS UNDER:- 2) THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS) HAS FURTHER ERRED IN CONFIRMING THE CHANGE IN THE OPINION OF ASSESSING OFFICER FOR NOT APPLYING THE EXPLANATION TO SECTI ON 73 TO ALL THE TRANSACTIONS IN RELATION TO SHARES WHETHER OF TRADING , SPECULATION OR INVESTMENT WHICH THE ASSESSEE HAS BEEN FO LLOWING CONSISTENTLY FROM INCEPTION OF THE COMPANY AND TAXING CAPITAL GAINS SE PARATELY AND TAKING IT OUT FROM THE PURVIEW OF EXPLANATION TO SECTION 73. 14. THE TRIBUNAL DISPOSED OFF GROUND NOS.1 TO 4 BY WAY OF ITS FINDING IN PARA 15 RESTORING THE SUBJECT MATTER OF ALL THE FOUR GROUNDS TO THE FILE OF A.O. FOR A FRESH DECISION. IN PARA NO.13.4 THE TRIBUNAL HAS RECORDED THAT THE REVENUE HAD ALL ALONG ACCEPTED THE SPECULATION INCOME OF THE ASSESSEE FROM SHARES U/S.143(3) AND THEREFORE REVENUE WAS NOT ENTITLED TO TAKE DIFFERENT VIEW FOR THIS YEAR. GROUND NO.2 OF THE ASSESSEES APPEAL BEFORE THE TRI BUNAL WAS ON CONSIDERING WHETHER THE ACTION OF THE CIT(A) WAS CORRECT IN NOT APPLYING EXPLANATION TO SECTION 73 TO ALL THE TRANSACTIONS IN RELATION TO SHARES WHETHE R OF TRADING, SPECULATION OR INVESTMENT ... FROM THE AFORESAID ORDER OF THE TRI BUNAL IT IS DISCERNIBLE THAT THE TRIBUNAL CONSIDERED NOT ONLY SPECULATIV E TRANSACTION OR THOSE INVOL VING INVESTMENT IN SHARES BUT ALSO THE TRANSACTIONS IN RESPECT OF TRAD ING OF SHARES. SINCE THE MATTER HAS BEEN RESTORED TO THE FILE OF A. O. FOR TAKING A FRESH DECISION IN THE IMMEDIATELY PRECEDING YEAR, RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER ON THIS SCORE AND REMIT THE MATTER TO THE FILE OF A.O. FOR TAKING A FRESH DECISION IN CONFORMITY WITH THE VIEW TO BE TAKE N BY HIM FOLLOWING THE DIRECTION OF THE TRIBUNAL IN ASSESSM ENT YEAR 2003-2004. 15. GROUND NO.7 OF THE ASSESSEES APPE AL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF PROPORTIONA TE EXPENDITURE OF RS. 24,35,630 BY TREATING IT AS INCURRED FOR SPECULATIV E LOSS. AT THE VERY OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT SIMILAR ISSUE CAM E UP FOR ADJUDICATION BEFORE THE TRIBUNAL ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 7 IN ASSESSMENT YEARS 2000- 2001, 2001-2002 AND 2005-2006 IN WH ICH THE SAME HAS BEEN DECIDED IN ASSESSEES FAVOUR. HE PLACED ON RECORD COPIES OF ORDERS PASSED BY THE TRIBUNAL IN RESPECT OF SUCH YEARS. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT CONTROVERT THIS FACT UAL POSITION. RESPECTFULLY FOLLOWING THE PRECEDENTS WE OVERTURN THE IMPUGNED ORDER ON THIS ISSUE A ND ORDER FOR THE DELETION OF ADDITION OF RS.24,35,630. THIS GROUND IS ALLOWED. 16. THE LAST EFFECTIVE GROUND OF THE ASSESS EES APPEAL IS AGAI NST TREATING CAPITAL LOSS OF RS.1,01,382 UNDER THE PROVISIONS OF EXPLANATION TO SECTION 73 AS SPECULATIVE LOSS. ON THIS ISSUE THE LEAR NED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE TRIBUNAL IN ASSESSMENT YE AR 2003-2004 HAS DEALT WITH SIMILAR POINT VIDE PARAS 13 TO 15 OF ITS ORDER AND EVENTUALLY THE MATTE R HAS BEEN RESTORED TO THE FILE OF A.O. FOR FRESH ADJUDICATION. IN THE ABSENCE OF THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTING OUT ANY DISTINGUISHI NG FEATURE IN THE FACTS OF THE INSTANT CASE VIS--VIS THOSE CONSIDERED AND DECIDED BY THE TRIB UNAL IN THE IMMEDIATELY PRECEDING YEAR, WE SET ASIDE THE IMPUGNED ORDER ON THIS ISSU E AND SEND THE MATTER BACK TO THE FILE OF A.O. FOR TAKING A FRESH DECISION IN ACC ORDANCE WITH THE DIRECTIONS GIVEN BY THE TRIBUNAL IN ASSESSMEN T YEAR 2003-2004. 17. FIRST GROUND OF THE REVENUES APPEAL IS AGAINST THE GRANTING OF DEPRECIATION ON BSE MEMBERSHIP CARD. FROM THE GROUND ITSELF IT IS APPARENT THAT THE LEARNED CIT(A) DELETED THE ADDITION RELYING ON TH E ORDER PASSED BY THE TRIBUNAL IN THE CASE OF TECHNO SHARE AND STOCKS LIMITED. IT IS NOTICED THAT THE HONBLE SUPREME COURT IN THE CASE OF TECHNO SHARE AND STOCKS LIMITED VS. CIT [(2010) 327 ITR 323 (SC)] HAS HELD THAT THE DEPRECIATION IS ALLOWA BLE ON BSE MEMBERSHIP CARD. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT CONT ROVERT THIS POSITION. RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HONBLE SUPREME COURT ON THIS ISSUE WE UPHOLD THE IMPUGNED ORDER. THIS GR OUND IS NOT ALLOWED. ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 8 18. GROUND NO.3 IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) IN DIRECTING THE A.O. TO TREAT THE LOSS INCURRED ON ACCO UNT OF DERIVATIVE AS NON-SPECULATIVE. WE HAVE DEALT WITH THIS ISSUE WHILE DISPOSIN G OFF GROUND NO.6 OF THE ASSESSEES APPEAL BY HOLDING THAT THE LOSS IN DERIVATIVE IS TO BE C ONSIDERED AS NON-SPECULATIVE BUSINESS LOSS. THE FINDING OF THE LEARNED CIT( A) ON THIS ISSUE IS, THEREFORE, VACATED AND THE GROUND IS ALLOWED. 19. GROUND NO.4 OF THE REVENUES APP EAL IS AGAINST UPHOLDING ALLOCATION OF EXPENSES BY HOLDING DERIVATI VE TRANSACTION AS NON-SPECULATIVE. WHILE DISPOSING OFF GROUND NO.7 OF THE ASSESSEES APPEAL WE HAVE HELD THAT THERE CANNOT BE ANY DISALLOWANCE OF PROPORTIONATE EXPENDITURE BY FOLLOWING TW O ORDERS OF THE TRIBUNAL PASSED IN ASSESSEES OW N CASE. BE THAT AS IT MAY THE FACT REMAINS THAT THE FINDING OF THE LEARNED CIT(A) IN HOLDING DERIVATIV E TRANSACTION AS NON- SPECULATIVE TRANSACTION HAS ALREADY BEEN EVACUATED BY FOLLOW ING THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BHARAT R. RUIA (HUF) [199 TAXMANN 87 (BOM.)] AND THE ORDER OF THE SPECIAL BE NCH OF THE KOLKATA TRIBUNAL IN THE CASE OF SHREE CAPITAL SERVICES VS. ACIT [(2009) 28 DTR (KOL) (TRIB.)] 1]. THIS GROUND IS DISPOSED OFF ACCORDINGLY. 20. IN THE RESULT, BOTH THE A PPEALS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN TH E OPEN COURT ON THIS 12 TH DAY OF AUGUST, 2011. SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 12 TH AUGUST, 2011. DEVDAS*` ITA NOS.2011& 2466/MUM/2008 M/S.EMKAY SHARE & STOCK BROKERS LIMITED. 9 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - IV, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.
Mehul