TaxTMI 
TaxTMI 
2017 (10) TMI 1599
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....e AO before invoking the provisions of said section. 2. That the Ld. CIT (A) has erred in law in rejecting the contention of the appellant that the expenditure incurred in relation to the business of dealing in shares cannot be disallowed U/S 14A of the I. T. Act 1961 in view of the judgment of the Hon'ble Karnatka HC in the case of CCI Ltd. The Ld. CIT(A) ought to have followed the said judgment. 3. Without prejudice to the above grounds, the Ld. ClT (A) has grossly erred in law in not excluding the interest relatable to shares on which no dividend was received particularly when her predecessor had excluded such interest while computing disallowance U/S 14A in the preceding year. The disallowance, if any, could be restricted only to interest in relation to shares on which dividend was received and not the entire interest. 4. That Rule 8D (i) provides that interest directly relatable to exempted income is to be determined but the CIT (A) failed to make such exercise. 5. That no part disallowance of depreciation could be made in respect of flat purchased." 3. The appellant, Income Tax Officer, Ward 14 (4), New Delhi (hereinafter referred to....
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....ight of the facts and circumstances of the case. ITA NO.2054/DEL/2014 (FILED BY THE ASSESSEE) GROUNDS NO.1, 2, 3, 4 & 5 7. The ld. AR for the assessee by relying upon the decision rendered by Hon'ble Delhi High Court in case cited as Cheminvest Ltd. vs. CIT - (2015) 378 ITR 33 (Del.) and Hon'ble Punjab & Haryana High Court in case cited as Pr.CIT vs. State Bank of Patiala - (2017) 391 ITR 218 (P&H) contended that the assessee is into the business of trading in shares and has suo motu disallowed an amount of Rs. 4,13,678/- u/s 14A on the earned dividend income of Rs. 44,14,607/- and the AO without recording his dis-satisfaction made further disallowance of Rs. 55,31,601/- and as such Rule 8D is not applicable. Ld. AR for the assessee further contended that in case Rule 8D is found to be not applicable then only taxable income can be taxed. However, on the other hand, ld. DR for the Revenue to repel the arguments addressed by the ld. AR that when the assessee has himself applied the Rule 8D, it cannot challenge the impugned order. 8. Assessee by suo motu disallowed the amount of Rs. 4,13,678/- u/s 14A as per computation given before AO as under:- 1 Expenditure directly....
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....n investments for the purpose of calculating disallowance u/s 14A, the finance charges paid to these two broker concerns can not be excluded from the amount of interest incurred in relation to the earning of exempt dividend income from investments and stock-in-trade. Hence, total amount of Rs. 95,37,415/- is being taken as interest expenses incurred during the year which can not be specifically and directly attributable to any particular income or receipt for calculating disallowance under rule 80(2)(ii). S.No. Head Particulars Amount (Rs.) (i) Expenses Directly relatable to Income in total Income 50% of bank/demat charges debited to P&L account 52,845 Disallowance under (i) 52,845 (ii) Interest paid not directly relatable to any Income (a) Interest Paid other than incl. (i) above 95,37,415 (b) Investments as on 01.04.2008 15,56,70,250 (c) Investments as on 31.03.2009 5,83,73,663 (d) Average value of Investments 10,70,21,956 (e) Total assets of Balance Sheet as on 01.04.2008 24,60,53,381 (f) Tota....
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....dance with the judgment cited as Cheminvest Ltd. vs. CIT and Pr.CIT vs. State Bank of Patiala (supra). Consequently, grounds no.1, 2, 3, 4 & 5 are determined in favour of the assessee for statistical purposes. Resultantly, appeal filed by the assessee is allowed for statistical purposes. ITA NO.2222/DEL/2014 (FILED BY THE REVENUE) GROUNDS NO.1, 2 & 3 14. AO made an addition of Rs. 1,00,00,000/- and Rs. 19,45,000/- as unsecured cash credit claimed as unsecured loan availed of by the assessee from M/s. Udgam Commercial Limited and M/s. One Touch Solution India Pvt. Ltd. respectively on the ground that assessee has failed to furnish, address, PAN of the creditors. 15. However, assessee sought to bring on record additional evidence in the form of confirmation of account; copy of bank statement of M/s. Udgam Commercial (P) Ltd. (lender); copy of bank statement of the appellant company reflecting the transactions; copy of income tax return filed by the lender for the AY 2009-10; copy of Memorandum and Articles of Association of the lender; and copy of the audited financials of the lender for the year ended 31st March 2009, by moving an application u/s 46A. Before proceeding f....