TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 1121
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....1. Since the Dividend Tax is paid by the Company, the said Dividend Income has suffered the tax and unlike other Exemptions, Dividend Income is not exempt but its there to avoid double taxation and hence sec.14A is not applicable and no disallowance is called for, therefore, Rs. 3, 19,081/- (proposed Rs. 6,20,6711- ) be deleted in full. 2. Without prejudice to above, your appellant submits as under: a) The learned CIT(A) erred in not appreciating the facts and the law on the subject and confirming the additional expenses disallowed u/s.14-A r.w.r. 8-0 - Rs. 3, 19,081/-. b) The learned CIT(A) erred in not appreciating the fact that your appellant has already disallowed the actual expenses of Rs. 9,434/- and there are no other expenses and....
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....tion thereof to the Long Term Capital Gain (Loss) and Short Term Capital Gain (Loss). b) Your appellant submits that the PMS Fees is to be held as against the Long Term Capital Gain (Loss) and Short Term Capital Gain (Loss) and accordingly the Short Term Capital Loss be allowed to be carried forward should be inclusive of the relevant PMS fees of Rs. 1,54,806/- and the total amount of Short Term Capital Loss of Rs. 32,35,358/- be allowed to be carried forward. c) Your appellant, therefore, submits that the Short Term Capital Loss should be inclusive of the relevant PMS fees of Rs. 1,54,806/- and the total amount of Rs. 32,35,358/- be allowed to be carried forward." 2. The issued raised in the first ground of appeal is against the confirm....
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....ates exempt income and AO had rightly applied the provisions of section 14A r.w.r. 80D of the Act. 6. The ld AR submitted before us that the disallowance of Rs. 3,19,081/- made by the AO and confirmed by CIT(A) was totally wrong and excessive. The ld counsel for the assessee submitted that the assessee suo motto disallowed Rs. 9,434/- on account of bank charges which were only incurred in relation to the exempt income while calculating the total income. This being the expense only qua exempt income and therefore no disallowance was warranted u/s 14A r.w.r 8D of the Act. The ld. Counsel for the assessee made alternative submissions that if at all the disallowance under rule 8D(2)(iii) was to be made, it could not be made on the basis of ave....
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....chase of shares as part of short term capital loss and allow carry forward of the same. 10. The facts in briefs are that the assessee paid PMS fee of Rs. 2,92,156/- to Enam Securities Direct Pvt Ltd for port folio management and apportioned the said fee between long term and short term loss in the proportion of the said losses. Rs. 1,54,806/- pertained the short term loss from shares and was claimed as part of the said loss for the purposes of carry forward. 11. The ld. AO rejected the contention of the assessee by holding that the whole amount of PMS fee Rs. 2,92,156/-related to exempt income and denied the benefit of carry forward. The action of the AO was also confirmed by the CIT(A) who dismissed the appeal by holding that PMS ....
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....not allow the carried forward of STCL to the tune of Rs. 1,54,806/-.Now the issue before us whether the expenses incurred in connection with PMS fee to portfolio manager is an expense which is incurred in connection with the share transfer or relates to dividend income which is exempt. The provisions of section 48(i) of the Act provides that the expenditure incurred wholly and exclusively in connection with such transfer shall be deducted from the full value of the consideration for calculating capital gain/loss. Conversely same analogy applies to the purchase also i.e at the time of purchase also the expenses which are wholly and exclusively incurred for the said transaction is also part of the purchase cost. We are, therefore, of the opin....