TaxTMI 
TaxTMI 
2017 (5) TMI 728
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.... the A.Ys. 2008-09-2009-10 vide orders dated 19-11-2010 & 30-11-2011 u/s 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in appeal of assessee in ITA No. 1708/Mum/2012 is against the order of CIT(A) confirming the disallowance made by AO in regard to expenses relatable to exempted income by invoking the provisions of section 14A of the Act read with rule 8D of the IT Rules 1962 (hereinafter the Rules). 3. Briefly stated facts are that the assessee is engaged in the business of share broking and trading. During the year under consideration, the assessee earned tax free dividend income of Rs. 38,48,595/- and claimed the same as exempt. The AO noted that the assessee has not allocated any expenditure qua exe....
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....taking transactions of shares which have yielded exempt income. The amount of such expenditure is, therefore, required to be determined as per provisions of Rule 8D. In view of above discussion, the addition is confirmed. Thus, this ground of appeal is dismissed. " Aggrieved, now assessee is in appeal before us. 4. At the outset, the learned Counsel for the assessee only made request that he is ready to prove that no expenditure is incurred qua the exempted income because only dividend was credited in the bank account directly. According to him, the AO has only disallowed half percent of average value of investment i.e. Rs. 11,79,775/-. Accordingly, the learned Counsel for the assessee requested for remanding the matter back to the fi....
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.... as under: - "3.2 I have considered the submissions made by the appellant carefully. It is seen that similar issue was involved in appellant's own case in A.Y. 2006-07. My predecessor while deciding appeal of the appellant for A.Y. 2006-07 in Appeal No.IT/CIT(A)IV/Cir.4/360/0S-09, dtd. 14.09.2009 has made following observations: - "The appellant is treating tire shares as 'investment' as the books of accounts and income of Rs. 3,92,84,603/- in respect of one script Sesa Goa Ltd. is after bonus share issued by the company of 36000 shares. The activity of the appellant is not different than that of A.Y. 2005-06 where the AO has accepted the appellant to be an 'investor' so far as long lent: capital gain is conc....
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....ompany for less than 30 days as business income and wherever shares held for more than 30 days treat the same as capital gain. For this Tribunal vide Para 9 observed as under: - "9. Taking into the facts into consideration, we find no reason to deviate from the decision taken by the CIT(A) wherein, he has accepted the conversion of stocks from stock in trade to investments. While holding so, the Bench, too noticed that there were certain shares, which were held for short duration. On this point, the Bench questioned the A.R. of the assessee about the frequency of holding. The AR fairly conceded that the direction be given to the AO to treat those shares/stocks as business, wherever the holding of the shares/stock is less than 30 days. Ta....