2013 (6) TMI 806

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.... profit u/s 115 JB. 2. We first taken up the appeal of the assessee in ITA no. 6935/M/2011. In this appeal the only dispute raised is regarding disallowance of expenses u/s 14A of the IT Act. The AO during the assessment proceedings noted that the assessee was engaged in the business of broking in shares and securities, trading in shares and securities as well as making investments. The assessee had received dividend income of Rs. 1,03,80,734/- which was exempt from tax. The AO, therefore made disallowance of expenses u/s 14 A aggregatomg to Rs. 57,81,298/- consisting of interest disallowance of Rs. 41,96,800/- and other expenses of Rs. 15,84,498/- as per Rule 8D. 2.1 The assessee disputed the decision of AO and submitted before CIT (A), ....

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....nterest income should have been considered under Rule 8D. Reliance for the said proposition was placed on the judgment of of Kolkata bench of Tribunal in case of DCIT Vs. M/s Trade Apartment Ltd., in ITA no. 1277/Kol/2011. The learned DR on the other hand supported the orders of authorities below and placed reliance on the decision of Kolkata bench of Tribunal in case of Gulshan Investment Co. Ltd. in ITA 666/Kol/2012. 3. We have perused the records and considered the rival contentions carefully. The dispute is regarding disallowance of expenses u/s 14 A of the IT Act. The assessment involved is assessment year 2008-09 from which Rule 8D, the method prescribed by the Government for computation of disallowance u/s 14A is applicable on which....

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....cision of any Tribunal or Hon'ble Court have been brought to the notice by the learned DR. We, therefore, hold that while computing the disallowance of interest under Rule 8D only the net interest will be considered and the expenses incurred in relation to the dividend received from trading shares have to be excluded. We, therefore, restore the issue to the file of AO for fresh computation after necessary examination in the light of observations made in this order and after allowing opportunity of hearing to the assessee. 4. The appeal of the revenue in ITA 7355/Mum/2011. The only dispute raised by the revenue in this appeal is allowability of rebate u/s 88E while computing the book profit u/s 115 JB. The claim of the assessee was rejected....