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Income Tax Appellate Tribunal, KOLKATA BENCH “A” KOLKATA
Before: Shri S.S.Godara & Dr. A.L. Saini
आदेश /O R D E R PER S.S.Godara, Judicial Member:- This assessee’s appeal for assessment year 2012-13 arises against the Commissioner of Income Tax (Appeals)-9 Kolkata’s order dated 21.03.2017 passed in case No.163/CIT(A)-9/Wd-1(4)/2016-17/Kol involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused. 2. The assessee has raised two substantive grounds in the instant appeal. Its case is that the Assessing Officer as well as the CIT(A) have erred in law and on facts in treating its income from jobbing / speculation amounting to ₹2,99,06,869/- as income from trading thereby not allowing speculation loss of ₹5,36,43,278/- to be set off against the same and invoking sec. 14A r.w.s.
Allbright Electricals Pvt. Ltd. Vs. ITO Wd-1(4), Kol. Page 2 Rule 8D disallowance of ₹3,16,023/- in the course of assessment framed on 30.03.2015 and affirmed in the lower appellate proceedings.
It emerges that the assessee’s former claim arose from its alleged jobbing activity sought to be treated as speculation profits u/s 43(5) of the Act. the Assessing Officer was of the view that the assessee’s “jobbing” activity losses could not be treated as speculation income u/s 43(5) of the Act and therefore, the same deserves to be treated as normal business profits not entitled to be set off against the speculation loss of ₹536,43,278/-.
Coming to latter issue of sec.14A r.w.s. Rule 8D disallowance, the Assessing Officer was of the view that since the assessee had shown investment in equity shares under “non-current investments” in its balance- sheet as on 31.03.2012, the income from such investments in equity shares in the form of dividend; irrespective of the fact as to whether actual exempt income had been derived or not, would invoke the impugned disallowance. He therefore added ½ % of average value of investment coming to ₹3,16,023/- in issue.
Suffice to say, the CIT(A) has affirmed the above twin disallowances / additions in his lower appellate order reading as under:- “4.Conclusin: I have gone through the written submission of the appellant and the findings in assessment order, “jobbing” is nothing with trading in shares which is a business income and not speculation. The judgments cited by the appellant for disallowance u/s 14A are not relevant to the facts of the appellant’s case. The assessment order is confirmed.”
Both the parties reiterate their respective stands against and in support of the impugned disallowance under the twin head(s) speculation income and the one pertaining to the alleged exempt income. It is sufficiently clear from the CIT(A)’s foregoing adjudication that he has neither framed any points of adjudication nor made any detailed adjudication thereupon as contemplated u/s. 250(6) of the Act. Coupled with this, there is hardly any dispute that hon'ble jurisdictional high court’s decision in CIT vs Ashika Global Securities Ltd. ITAT 100 of 2004 GA No.2122/2014 dated 11.06.2018 holds that the sec.