2024 (2) TMI 1476

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.... 14A of the Income-tax Act, 1961 [the Act, for short] r.w.r 8D of the Rules. 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of providing securities broking services and depository services to retail clients. During the year under consideration, the assessee earned dividend income of Rs. 3,05,54,320/- from shares held by it as part of its business of trading in securities, which was claimed as exempt u/s 10(34) of the Act. 4. The assessee filed its original return of income on 30.11.2015 for which it made a suo motto disallowance of Rs. 50,99,442/- u/s 14A r.w.r 8D of the Act. The assessee revised its return of income on 31.03.2017 and suo motto disallowance was revised to Rs. 1,11,....

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....during the year itself, there being no opening and closing stock. 10. Though the assessee has suo motto disallowed Rs. 1,11,19,312/-, yet as per the ratio laid down by the Hon'ble Supreme Court in the case of Maxopp Investment Ltd Vs. CIT 402 ITR 640, the assessee was not required to make any disallowance u/s 14A of the Act on shares held as stock in trade. Relevant findings of the Hon'ble Supreme Court read as under: "36) There is yet another aspect which still needs to be looked into. What happens when the shares are held as 'stock-in-trade' and not as 'investment', particularly, by the banks? On this specific aspect, CBDT has issued circular No. 18/2015 dated November 02, 2015. XXXX 38) From this, Punjab and Ha....