TaxTMI 
TaxTMI 
2018 (6) TMI 825
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....ing the disallowance u/s 14A r.w.r. 8D of Rs. 58,55,000/-, (i.e. 1/4 % of average investments against exempted income in respect of exempted income of Rs. 4,75,92,195/-. 2. That on the facts & circumstances of the case and provisions of the law, the learned CIT(Appeal) has also erred in not granting the TDS credit of Rs. 2,18,05,252/-. The ld. CIT(Appeals) has also erred in not fully appreciating and adjudicating this issue in light of our submissions made before her resulting into passing of non-speaking order which is against principle of natural justice. 3. That in light of the ground no.1 above, the learned CIT(Appeal) has erred in restricting the addition of Rs. 58,55,000/- to book profit under MAT (section 115JB) in respect of exempted income. 4. That on the facts & circumstances of the case and provisions of the law, the learned 1 Assessing Officer has erred in charging interest u/s 234C of Rs. 1,10,23,074/-. The Id CIT(Appeal) has also erred in not fully appreciating and adjudicating this issue in light of our submissions made before her resulting into passing of non-speaking order which is against principle of natural justice. 5. That on....
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....ecurities (i.e. shares/units ) were held as a stock in trade and the dominant and immediate object behind acquisition of securities was to earn profit on sale of securities at the earliest point of time, which is chargeable to tax under the Act and the dividend and tax-free income has been received incidentally. The assessee also contested that average investment made in earning the exempt income was of Rs. 11,709.71 Lacs, and which was much below the average non-interest-bearing funds of Rs. 5,90,013.72 lakhs available with the assessee and hence, no cost of fund was involved in earning the exempt income. The Assessing Officer was not satisfied with the submission of the assessee and invoking Rule 8D of the Rules, made disallowance as under: (i) Interest not directly attributable to any particular income/receipt, under Rule 8D(2)(ii) of the Rules amounting to Rs. 630.79 lakhs (ii) Amount equal to one-half percent of average value of investment in assets which could yield tax-free income, under Rule 8D (2)(iii) of the Rules amounting to Rs. 58.55 lakhs. 4.2 The Ld. CIT(A) following the finding of the Commissioner of Income Tax (Appeals) for assessment year 2009....
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....urt in (2018) 91 taxmann.com 154 along with the case of Maxxopp Investment limited also decided the issue of section 14A of the Act in the case of State Bank of Patiala, wherein it is held that in case of shares held as stock-in-trade, the main purpose was to liquidate those shares, whenever the share prices goes up in order to earn profit. He submitted that the appeals filed by the Revenue challenging the judgment of Hon'ble Punjab and Haryana High Court were accordingly dismissed by the Hon'ble Supreme Court. Thus, according to the Ld. Counsel, whenever the shares are held as stock in trade for earning profit, particularly in case of banks, the dividend income earned is incidental and no disallowance under section 14A of the Act is warranted. 4.4 On the contrary, the Ld. DR referred to paras 38 & 39 of decision of the Hon'ble Supreme Court in the case of Maxoop investment limited(supra) and submitted that irrespective of the fact that shares are held as 'stock-in-trade' and business income is earned on sale of such shares, the disallowance corresponding to the dividend income has to be made proportionately. 4.5 We have heard the rival submissions and perused the relevant ma....
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.... 39. In those cases, where shares are held as stock-in-trade, the main purpose is to trade in those shares and earn profits therefrom. However, we are not concerned with those profits which would naturally be treated as 'income' under the head 'profits and gains from business and profession'. What happens is that, in the process, when the shares are held as 'stock-in-trade? certain dividend is also earned, though incidentally, which is also an income. However, by virtue of Section 10 (34) of the Act, this dividend income is not to be included in the total income and is exempt from tax. This triggers the applicability of Section 14A of the Act, which is based on the theory of apportionment of expenditure between taxable and non-taxable income as held in Walfort Share and Stock Brokers P Ltd. case. Therefore, to that extent, depending upon the facts of each case, the expenditure incurred in acquiring those shares will have to be apportioned. 40. We note from the facts in the State Bank of Patiala cases that the AO, while passing the assessment order, had already restricted the disallowance to the amount which was claimed as exempt income by applying ....
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....lowed proportionately. In view of the above, we feel it appropriate to restore this issue to the file of the Assessing Officer for determining proportionate disallowance of expenditure under section 14A of the Act following the decision of the Hon'ble Supreme Court in the case of Maxxop Investment Limited (supra). It is needless to mention that the assessee shall be afforded adequate opportunity of being heard. Thus, the Ground No. 1 of the appeal is allowed for statistical purposes. 5. In ground No. 3 of the appeal, the assessee has challenged disallowance under section 14A of the Act to the book profit under section 115JB of the Act restricted to the amount of Rs. 58.55 lakhs by the Ld.CIT(A). 5.1 Facts qua the issue in dispute are that the Assessing Officer while computing book profit under section 115JB of the Act, made addition of Rs. 6,89,34,000/- for amount of expenditure relatable to exempt income as provided in clause (f) of Explanation to section 115JB of the Act. The Assessing Officer added this amount, which was computed by him for disallowance under section 14A of the Act. The Ld. CIT(A) restricted this amount to Rs. 58.55 lakhs. The assessee is aggrieved with ab....
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.... the deductee, the Income Tax Department has all powers to recover the tax from the deductor, but for the default of the deductor, the deductee cannot be penalized and put to any undue hardship by not allowing TDS deducted at source. In support of the contention, the counsel relied on following judicial pronouncement: i) Yashpal Sahwney Vs. DCIT, 293 ITR 539 ii) Court on its Own Motion vs. CIT, 2012-TIOL-384-Del-IT (Del. HC), order dated 31.08.2017 iii) Citicorp Finance (India) Limited Vs. Addl. CIT in ITA No.8532/Mum/2011, order dated 13.09.2013 (Mum.-Trib.) iv) 3i Infotech Limited Vs. DCIT, ITA No.7786/Mum/2012, dated 01.02.2013 (Trib.-Mum.) 6.3 The Ld. DR, on the other hand, submitted that credit of TDS must have been provided by the Assessing Officer on the basis of form No. 26AS and the assessee will get credit as and when deductor will deposit the tax deducted at source to the government account. 6.4 We have heard the rival submissions and perused the relevant material on record. The assessee claimed that credit of TDS of Rs. 41,11,715/- has not been given by the Assessing Officer. The form No. 26AS maintained on the database of the I....
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....CIT(A) has not specifically decided this ground no. 5 taken and treated the same as consequential and decided accordingly at para no. 9 of her order. "As per Income Tax Computation Form, the interest charged under 234C is of Rs. 1,10,23,074/-. Whereas it works out to Rs. 5,27,223/- as detailed below, after considering the revised return filed by the Bank and TDS credit allowed by the ld. AO of Rs. 5,67,16,195/- as against the claim of TDS of Rs. 7,85,21,447/- in the revised return. S. No Particulars Rs. Rs. 1. Returned Income 5279260912 2. Tax liability as per revised return of income 1753638494 3. Less: TDS claimed allowed by Id AO 56716195 4. Advance Tax Liability [2-3] 1696922299 5. Advance Tax installment due Amount due Amt paid Shortfall 5.1 June 15 @ 12% of S.No.4 203630676 379300000 0 5.2 Sept 15 @ 36% of S.No.4 610892028 1137900000 0 5.3 Dec 15 @ 75% of S.No.4 1272691724 1459200000 0 5.4 Mar 15 @ 100% of S.No.4 1696922299 164....
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....e mistake and re-compute the tax liability of the assessee accordingly. This ground of the appeal is accordingly allowed for statistical purposes. 9. The ground No. 6 relate to interest under section 234B of the Act amounting to Rs. 32,40,33,468/-. 9.1 The Ld. counsel submitted that this ground is consequential to the earlier grounds, accordingly we are not required to adjudicate upon and dismiss the ground as infructuous. 10. In the result, the appeal is allowed for statistical purposes. ITA No.1249/Del/2015 for AY: 2012-13 11. The grounds raised in IT No. 1249/Del/2015 for assessment year 2012-13 are reproduced as under: 1. That on the facts and circumstances of the case and provisions of the law, the learned CIT(Appeal) has erred in restricting the disallowance u/s 14A r.w.r. 8D of Rs. 62,62,000/-. (i.e. V2 % of average investments against exempted income) in respect of exempted income of Rs. 4,62,11,137/-. 2. That in light of the ground no.1 above, the learned CIT(Appeal) has erred in restricting the addition of Rs. 62,62,000/- to book profit under MAT (section 115JB) in respect of exempted income. 3. That on the facts & circumstances o....