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2010 (11) TMI 183 - AT - Income TaxComputation of Dis allowance u/s 14A - Condonation of delay in filling the appeal of 67 days - The delay has been occurred due to the reason of non availability of one of the directors which is a bonafide, non intentional or not deliberate - It is settled law that while condoning the delay, the court should take a lenient view – It was held that delay is condoned Disallowance u/s 14A of the Act - Assessee company is engaged in the business of trading in shares and securities as well as in private projects and investment in shares and securities - High Court has held that the provisions of section 14A and Rule 8D cannot be applied prior to the assessment year 2008-09 Disallowance of proportionate Interest - The investment has been made only to the extent of their own funds. - assessee declared short term as well as the long term capital gain from investment then the question of disallowance u/s 14A regarding the interest expenditure on borrowed funds if any utilized for investment purposes does not arise specifically when no dividend income is earned on the shares purchase for investment. Disallowance of proportionate administrative expenses - There cannot be a parity or equal basis for apportionment of the administrative expenses between the delivery based transaction and non-delivery based transaction as well as trading and investment activities. Undisputedly the labour hours and other overhead expenses will be less in case of non-delivery based transaction of purchase and sale of shares & securities in comparison to the delivery based transaction. Similarly in case of collection of dividend through cheques or vouchers will costs more than direct credit in D-mat account. It is undisputable fact that the dividend was directly credited in the D-mat account. Secondly, the dividend income is on the shares held for trading purposes. - Matter remanded to the file of AO with direction.
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