TaxTMI 
TaxTMI 
2014 (2) TMI 671
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....appeal. The assessee is in the business of share and stock broking, merchant banking, underwriting of securities and distribution of financial products etc. It filed total income of Rs.89.54 crores. In the course of assessment proceedings, the AO disallowed entrance fee paid to the club of Rs.15,68,750/- and also STT paid to an extent of Rs.55,88,717/-, bad debts to the extent of Rs.15,93,763/- and an amount of Rs.6,52,460/- stated to be penalty in violation of bye-laws of stock exchange and disallowance under section 14A invoking Rule 8D at Rs.33,51,001/-. AO also levied interest u/s 234B. The assessee contested the same before CIT(A) who deleted the disallowance of penalty and also gave relief on interest under section 234B while confirmi....
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....nds many more times and it's profit in the year itself is more than investments. Therefore, there is no utilization of borrowed funds which are exclusively used for the business purposes. It was the contention that no amount need be disallowed under section 14A. The ld. DR however supported the orders of the AO. 6. We have considered the rival contentions. As held by the Hon'ble Jurisdictional High Court in the case of Godrej & Boyce Manufacturing Co. Ltd. (supra) Rule 8D cannot be invoked for assessment year 2006-07. Even as seen from the computation the AO arrived at average investment at Rs.39.88 crores whereas average of investments at the end of the year and beginning of the year comes to about Rs.27.00 crores only. Therefore, even ....
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....he matter was restored to AO for examination of the contentions raised by the assessee. The order of ITAT in ITA No.5372/Mum/2008 and ITA No.5992/Mum/2008 for assessment year 2005-06 is as under :- "16. We have carefully considered the rival submissions and perused the orders of the lower authorities. We find some force in the contention of the Counsel for the assessee so far as the treatment of brokerage inclusive of STT is concerned. However, in all fairness, in our humble opinion, this issue deserves to be looked afresh. Therefore, we restore this issue back to the file of AO with a direction to examine the book entries in the light of demonstration made by the Counsel for the assessee before us. Needless to mention that a reasonable ....
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....,750/- as amount paid to club M/s Wellington Gymkhana. The assessee relied on the decision of Hon'ble Bombay High Court in the case of OTIS Elevator Co.(I) Ltd. (195 ITR 682) which Assessing Officer did not agree and held that expenditure was capital in nature and hence can not be allowed. The ld. CIT(A) while allowing "hoarding charges" of Rs.68,750/- however, confirmed the amount of Rs.15.00 lacs. It was submitted that this amount was paid for employee-director and the amount is allowable by virtue of the judgment of Hon'ble Supreme Court in the case of CIT, Bangalore vs. United Glass MFG Co. Ltd. in Civil Appeal No. 6447 of 2012 and also by the decision of Hon'ble Delhi High Court in the case of CIT vs. Samtel Color Ltd. (326 ITR 425). T....
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....ing debited by the assessee on violation of the bye laws of the stock exchange. The Counsel once again pointed out that the issues involved in these grounds are also covered by the very same decision of the Hon'ble jurisdictional High Court (supra) wherein on the following question raised by the Revenue, the Hon'ble High Court held in para-3 as under: "3. As regard question (C) is concerned the finding of fact recorded by the I.T.A.T. is that the amount paid as penalty was on account of irregularities committed by the assessee's clients. Such payments were not on account of any infraction of law and hence allowable as business expenditure. In such a case the Explanation to section 37 would not apply. Accordingly question (C) raised by th....
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....t be charged with the default of making less payment of advance tax. The appellant relied upon the decision in the case Sedco Forex International Drillin Co. Ltd. 264 ITR, Page 320. The return of income was filed on 30.11.2006. The CBDT, vide Notification No. 45/2008 is dated 24.3.08, the Special Bench's decision of ITAT, Mumbai dated 20.10.2008 in the case of M/s Daga Capital Management Pvt. Ltd. in ITA No. 8057/M/03. Under the circumstances, it is held that the appellant could not have visualized the disallowance u/s 14A in accordance with Rule 8D amounting to Rs33,51,001/- at the time of filing of return. The law does not envisage impossible. The A.O. is, therefore, directed to exclude the amount of disallowance u/s 14A for levy of inter....