TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 637
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....come-Tax(Appeals) erred in confirming the disallowance of proportionate interest u/s 14A read with rule 81)(2)(ii) of Rs. 7,09,975/- without appreciating that own funds are more than the investments in shares and as such no interest should be attributed to earn exempt income and the reason assigned for doing so are wrong and contrary to the facts of the case, the provisions of Income Tax Act, 1961 and the Rules made thereunder. c) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance u/s. 14A read with rule 81)(2)(iii) of Rs. 1,78,179/- without appreciating the fact that appellant has not incurred any expenditure for earning exempt dividend income, and the reason given for doing so are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961, and Rules made thereunder. d) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-Tax(Appeals) erred in holding that even stock-in-trade have to be considered for disallowance u/s 14A read with rule 8D of the Income Tax Rules, 1962 and the reasons assigned for do....
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.... in Rs.) Loan Funds Relevant to the year of Investment (Amount in Rs.) 1 Ajcon Commodity Brokers Ltd. 1,77,50,000 1994-1995 5,46,91,249 66,11,000 2 Ajcon IT Com Ltd. 16,00,000 2007-2008 10,09,27,949 2,43,30,311 He thus submitted that, no disallowance should be made in view of the decision of Hon'ble Bombay High Court in the case of CIT vs Reliance Utilities and Power Ltd., reported in [2009] 313 ITR 340; and HDFC Bank Ltd., reported in [2014] 366 ITR 505. He further pointed out that, in any case the investment has been made in the subsidiary and associate company which are in the nature of "strategic investments" hence no disallowance of indirect expenditure should be made, because they were made for the purpose of business. He further submitted that, AO has also considered the stockin- trade while working out the income from investment for computing the disallowance as required under Rule 8D. Thus, he submitted that, same should be removed from working of the average value of investment. In support, he relied upon the following decisions:- Sr. No. Case Law Citation/ITA No. 1 DCIT vs M/s India Advantage Securities Ltd. ITA No.6711/Mum/2011 & confirmed b....
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....on charges paid to stock-exchange by invoking of the provisions of section 40(a)(ia) by the authorities below on the ground that, assessee has not deducted the tax at source under section 194J on such payments. We find that, the Ld. CIT(A) has decided the issue following the decision of Hon'ble Bombay High Court in the case of CIT vs. Kotak Securities Ltd., reported in [2016] 340 ITR 333. Now as admitted by both the parties, the decision of Hon'ble Bombay High Court has been reversed by the Hon'ble Supreme Court in the case of CIT v. M/s Kotak Securities Ltd. in Civil Appeal No.314 of 2016, vide judgment and order dated 29th March, 2016 wherein, after analyzing the entire issue in detail, their Lordships have held that, the payments made to the stockexchange is not in the nature of 'technical services' but for facilities provided by the stock-exchange and accordingly, no TDS is deductible under section 194J. The relevant observation and finding of the Hon'ble Supreme Court in this regard is as under:- 6. What meaning should be ascribed to the word "technical services" appearing in Explanation 2 to clause (vii) to Section 9(1) of the Act is the moot question. In Commissioners of In....
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....nd individual requirement of the user or consumer who may approach the service provider for such assistance/service. It is only service of the above kind that, according to us, should come within the ambit of the expression "technical services" appearing in Explanation 2 of Section 9(1)(vii) of the Act. In the absence of the above distinguishing feature, service, though rendered, would be mere in the nature of a facility offered or available which would not be covered by the aforesaid provision of the Act. 9. There is yet another aspect of the matter which, in our considered view, would require a specific notice. The service made available by the Bombay Stock Exchange [BSE Online Trading (BOLT) System] for which the charges in question had been paid by the appellant - assessee are common services that every member of the Stock Exchange is necessarily required to avail of to carry out trading in securities in the Stock Exchange. The view taken by the High Court that a member of the Stock Exchange has an option of trading through an alternative mode is not correct. A member who wants to conduct his daily business in the Stock Exchange has no option but to avail of such services. Ea....