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2012 (10) TMI 529 - AT - Income TaxDisallowance u/s 14A of the Act - Held that:- The section only permits the Assessing Officer, in an indivisible business consisting partly of taxable activities and partly of tax-free activities, to identify expenditure, if any, incurred in relation to the earning of non-taxable income and disallow it. The section cannot be taken beyond this to attribute, by some yardstick, every item of expenditure which has no apparent connection or nexus with the earning of tax free, to the earning of tax-free income - appeals of the revenue are dismissed. Loss on Sale of Shares -short term capital loss to be set off against the long term capital gain - Held that:- Loss on sale of shares of Lanco Net Ltd. are not in accordance with the business activities of the assessee and hence not allowable as capital loss and same cannot be adjusted against capital gains - Order of the CIT(A) is confirmed - Ground of appeal of the assessee is dismissed. Disallowance of legal and professional fees - deduction u/s 80IA. - The assessee contended that he had computed profits of the undertaking and has also filed certificate of the auditor in respect of the eligible undertaking and has maintained proper Books of A/c as required to compute profits - set aside this issue to the file of the Assessing Officer for reconsidering the profitability of the eligible undertaking on the basis of the workings furnished by the assessee, after giving reasonable opportunity to the assessee to put forward its case - appeal of the assessee is treated as allowed for statistical purposes.
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