Explanaion of section 73 is not applied in the transaction of govt securities and expenditure claimed must be accompanied by evidence

Last updated: 29 August 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
The learned Assessing Officer has erred in disallowing Rs. 25.00 lacs, on ad hoc basis, towards share trading expenses on erroneous assumption that the appellant has incurred expenditure towards speculation business and allocated on proportion basis the total expenditure without analysing the nature of expenditure which are directly related to the Broking Activity which is the principal business of the Appellant. 1:2. The Appellant had earned speculative income of Rs. 53,974 arising from few Proprietary trades on the portfolio of shares and Government securities and valuation of securities acquired in earlier years. The Appellant also submits that the trading in Government is outside the purview of Explanation to Section 73 of the Income Tax Act and the profit arising from valuation at the end of the year do not entail any expenditure allocable to this business.

Citation :
M/s. Tower Capital & Securities Private Ltd.,Aban House,25/31, Ropewalk Lane, Off Ramport Road, Mumbai – 400 023. PAN: AAACT 2154 M (Appellant) Vs. DCIT, Circle 4(2),Mumbai. (Respondent)