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2019 (1) TMI 1625 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - HELD THAT:- Issue stands squarely covered by following observation by Hon’ble Supreme Court in case of Maxopp Investments vs CIT [2018 (3) TMI 805 - SUPREME COURT] has rendered a clear finding in respect of banking institutions which is peculiar. Present assessee before us is also a Bank, where shares were held as stock-in-trade and therefore it becomes business activity of assessee. We allow this ground raised by assessee and hold that these were not investments made by assessee in order to fall within the ambit of Rule 8D (iii) of Income tax Rules 1963. Disallowance of expenditure being penal in nature - HELD THAT:- AR could not establish by way of evidence anything contrary to the view taken by authorities below. Further, Ld.AR is also not refuting the fact that the payment is not an expenditure which was penal in nature. Under such circumstances we have no option but to uphold the view of ld.CIT(A) - Decided against assessee. Claim of leave encashment u/s 43B - year of payment - HELD THAT:- Direct Ld.AO to allow claim of assessee in the year in which it has been paid and to disallow in the year of provision. We accordingly set aside Ground No. 4 back to Ld.AO with a direction to disallow the claim, in the year of provision and to allow claim in the year of payment. Ld. AO is directed not to levy any interest and penalty in the year of disallowance.
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