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2017 (3) TMI 1548 - AT - Income TaxDisallowance u/s.14A - whether the expenditure eligible to stock in trade can be disallowed invoking the provisions of section 14 A r.w.r.8D? - Held that:- We find that in the cases relied upon by the AR, it has been clearly held that no disallowance u/s.14A r.w.r 8D of the Rules, can be made for the securities held as stock in trade. The reason behind it is not difficult to understand. Income arising from the business of an assessee is taxed under the head business and profession. So, all the expenses have to be considered while computing the business income. On the other hand, if the securities are held as investment and an assessee earns exempt income, same can be subjected to disallowance as envisaged by the provisions of section 14A. In the case under consideration the assessee is dealing in shares and F &O segments and offering its income under the head business income. Therefore, in our opinion, the FAA was not justified in confirming the disallowance made for expenses incurred with regard to stock in trade. Reversing his order, we decide the effective ground of appeal in favour of the assessee.
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