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2015 (9) TMI 1432 - AT - Income TaxDisallowance u/s.14A - Held that:- AO had rejected enhanced the disallowance made by the assessee as per the provisions of section 14A r.w.Rule 8D of the Rules,that the assessee had FAA had not dealt with the arguments taken by the assessee during appellate proceeding namely holding of shares as stock in trade and interest expenditure incurred for personal or business purposes,that while calculating the total assets appearing in the balance sheet the AO taken assets after deducting the current liabilities and provisions.In our opinion,such assets should be total of fixed assets,investments and current assets,loans and advances.We are also of the view that the interest expenditure incurred under the heads interest on share margin,interest on IPO funding,and interest on car loans should not be considered for disallowance to be made u/s.14A of the Act.We find that in the matter of India Advantage Securities Ltd.(2012 (11) TMI 458 - ITAT, MUMBAI )the issue of proportionate disallowance u/s.14A r.w.Rule 8D was discussed by the Tribunal in length and it was held that stock in trade(Shares)cannot be considered for disallowance and that shares held as investment could be taken into consideration for calculation of Rule 8D. The said judgment was confirmed by the Hon’ble Bombay High Court (2015 (6) TMI 140 - BOMBAY HIGH COURT ). Considering the above we are of the opinion that the disallowance made by the AO under rule 8D was on higher side.Following the above judgment of the Hon’ble jurisdictional High Court,we direct the AO to restrict the disallowance at ₹ 6.89 lakhs.In short,we endorse the alternate calculation submitted by the assessee. Addition in respect of salary paid - addition u/s.40A(2)(b) - Held that:- .We have heard the rival submissions and perused the material before us.We find that the AO has claimed that the assessee was a director of the company whereas the assessee has stated that BKM was promoted as Senior Finance Executive.We do not know from where the AO arrived at the conclusion that she was a director.The FAA has not considered the arguments advanced before him about the educational qualification of BKM and duties performed by her.We find that in subsequent years she has been given higher salary and the AO has not made any disallowance in that regard while passing order u/s.143(3)of the Act. - Decided in favour of assessee
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