2019 (1) TMI 1902

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....e circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance to the extent of Rs. 2,81,54,633/- u/s 14A r.w. Rule 8D of the IT Rule. 3. In a nutshell, the facts are that the assessee filed his return of income for the assessment year (AY) 2011-12 on 29.09.2011 declaring total income at Rs. 10,67,92,460/-. The assessee has declared income from house property, business income, short term capital gains, long term capital gains and income from other sources.  During the year under consideration, the assessee has earned a dividend income of Rs. 3,54,15,176/- on shares and claimed it as exempt u/s 10(34) of the Act. In response to a query raised by the Assessing Officer (AO) to explain as to why disallowance u/....

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....ed by the order of the AO the assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A), following the decision of the High Court in CCI Ltd. v. JCIT 206 Taxman 563 (Karn.), Leena Ramchandran 2010 TIOL 541 (Ker.) and the order of the Tribunal in Daga Capital Management (P.) Ltd., India Advantage Securities Ltd. (ITA No. 3724/Mum/2005) and Esquare Pvt. ltd. (ITA No. 5688/Mum/2011), held that section 14A of the Act is not applicable in respect of dividend income received from shares held as stock-in-trade. The Ld. CIT(A) found that the issue of disallowance u/s 14A and the applicability of Rule 8D have already been deliberated upon before the appellate authorities in appellant's own case and orders have been passed by the IT....

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....ument.  Further the Ld. counsel files a computation sheet mentioning (i) the suo motu disallowance of Rs. 13,22,294/- made by the assessee and net addition of Rs. 2,81,54,633/- made by the AO u/s 14A, (ii) the suo motu disallowance of Rs. 13,22,294/- made by the assessee and net addition of Rs. 94,28,114/- as per the assessee u/s 14A.  While arriving at the above computation, the Ld. counsel has mentioned the total value of non-taxable investment as on 31.03.2011 and 01.04.2010. Also as per 'Exhibit-A', closing stock as on 31.03.2011 on which dividend earned in FY 2010-11 has been mentioned. In 'Exhibit-B', opening stock as on 01.04.2010 on which dividend earned in FY 2010-11 has been stated. 7. We have heard the rival submissi....