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2019 (3) TMI 1200 - ITAT DELHIAddition u/s 14A - suo moto disallowance by assessee - correctness of the claim of the assessee in respect of such an expenditure in relation to the income which does not form part of the total income under the Act - HELD THAT:- Before jumping to the conclusion that the disallowance has to be worked out in accordance with the provisions of Rule 8D(2) of the Rules, AO did not refer to the correctness or otherwise of the disallowance made by the assessee herself. Requirement of law under Rule 14A(2) is that it is only if the AO having regard to the accounts of the assessee is not satisfied with the correctness of the claim in respect of such an expenditure in relation to the income which does not form part of the total income under the Act then only the AO shall determine the amount of expenditure incurred in accordance with the method prescribed under Rule 8D. Rule 8D(1)(a) also reflects this mandate of law. When we apply the provisions of Section 14A read with Rule 8D(1)(a) in the light of the observations in the case of Godrej & Boyce Manufacturing Co. Ltd [2017 (5) TMI 403 - SUPREME COURT OF INDIA] to the facts of the case, irresistible conclusion is that any addition made in violation of the above, cannot be sustained. We, therefore, while respectfully following the above line of decision allow grounds of assessee’s appeal and direct the learned AO to delete the same. Income from trading of securities - Correct head of income - income from short term and long term capital gain OR income from business - in respect of all the three years, CIT(A) had taken a consistent view that this receipt must be treated not as income from business but has to be treated as income from short term capital gain and long term capital gain - rule of consistency - HELD THAT:- A coordinate bench of this tribunal in the light of the decision of CIT vs Avinash Jain [2013 (1) TMI 315 - DELHI HIGH COURT] and CIT vs CNB Finwiz Ltd.[2014 (8) TMI 645 - DELHI HIGH COURT] held that the law on this aspect is fairly settled and in the facts and circumstances of the case, learned CIT(A) was right in directing the AO to treat the impugned receipt as income from capital gains and not as business income. In view of the consistent view on this aspect for all the Asstt. Years 2010-11, 2012-13 and 2013-14 and a coordinate bench confirming such a view for the AY 2010-11 whereas Revenue accepting the same for AY 2012-13, we are of the considered opinion that in the absence of any change in the fundamental facts permeating these three years, it would not be appropriate to allow the position to be changed in a subsequent year. We find our opinion fortified by the decision of the Hon’ble Supreme Court in the case of Radhasoami Satsang vs CIT [1991 (11) TMI 2 - SUPREME COURT] - direct the learned AO to treat this particular receipt as income from short term and long term capital gain but not as income from business. - decided against revenue
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