TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 322
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....law, the Ld.CIT(A) erred in deleting the addition of Rs. 1848392/- made u/s. 14A r.w.Rule 8D of the Income-tax Act by Assessing Officer." 2. "On the facts and in the circumstances of the case and in law, the Lcl.CIT(A) erred in deleting the addition made on account of penalty of Rs. 1837770/- on violation of the bye-laws of the stock exchange, which are statutory in character and thus amounted to infringement of law" . ii. "On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in ignoring the fact that the penalty is imposed under SEEI [procedure for holding inquiry and imposing penalty by Adjudicating Officer] Rules 1995 which has a binding character'. iii. "On the facts and in the circumstances of the ca....
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....dingly." 4. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in the business of shares trading and dealing in shares securities and investment. The assessee earned dividend income of Rs. 4,86,684 which is exempt u/s 10(34) of the Act. The AO noted that the assessee carrying of business of share trading and earning dividend income by utilizing the entire infrastructure available to it with the help of employees. However the assessee has not allocated any expenditure incurred by it towards earning of tax exempt dividend income as required by section 14A of the Act. The AO therefore relying on Daga Capital Management Pvt Ltd (ITA 8075/M/03) and applying Rule 8D read with section 14A of the ....
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....ural failure to follow the bye laws, rules /regulation of stock exchange. Therefore, the expenses are in the nature of payments towards violating the prescribed rules/ regulation, short /partial collection of margins, non-maintenance of complete records, delay in payout of funds and securities, incomplete KYC forms, etc which are mere breach of contractual liability and adhere to proper procedure and not for infringement or infraction of any statutory law, therefore not hit by explanation to section 37(1) of the Act. The issue is also covered by decision in the case of DClT v Enam Securities Pvt Ltd [ITA No. 4178/Mum/2009 dated 14-5-2010] and Goldcrest Capital Market Ltd v ITa (2010) 36 DTR177(Mum) In view of these facts, following the deci....
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....of the entrance fees paid to Sports Club by observing that the assessee had no intention to acquire any capital asset or to take advantage for the enduring benefit fo the business by paying entrance fees to the sports Club. The AR also relied in the case of CIT v Samtel Color Ltd (210 Taxation 395) (Delhi) wherein the. Delhi High Court has clearly distinguishing the decision of Kerala High Court in the case of Framestone Connector OEN Ltd v DCIT (157 Taxmen 116) (Ker) relied upon by the AO held that the reliance by the Kerala High Court on the Supreme Court decision in the case of Punjab State Industrial Development Corporation Ltd V CIT (225 ITR 792) (SC) was misplaced. The AR has also relied in the case of DCIT v Bank of America Securitie....
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....s. 4,11,748/- by observing that since only brokerage. which is only a part of the total debt is taken into account for computing the income of a share broker. only that part of the debt satisfies the condition laid down u/s.36(2) of the Act. The AO. therefore. held that the whole of the bad debt fell outside the ambit of s. 36(1) (vii) of the Act since it is not taken into consideration in computing the assessee's income. The AO further held that even alternate claim as business loss is not allowable. Therefore. the AO disallowed the sum of Rs. 4,11,748/- and added back to the total income declared by the assessee. 10.2 By the impugned order, the CIT(A) deleted the disallowance after observing as under :- "I have considered the facts and ....