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2012 (9) TMI 828 - AT - Income TaxWhether transacting in shares/mutual funds by engaging a Portfolio Management Services(PMS) held as an investment or trading activity – AO treat trading in shares by PMS provider is to be seen as one which has been done on behalf of the assessee and all the transactions carried out through the PMS provider were short term in nature with the motive of selling the shares at higher rates and booking profits – Held that:- As envisages that what the assessee was looking for by engaging the services of an expert, namely, the PMS provider, was appreciation and maximization of wealth and not merely en-cashing of profits with a view of a trader. Therefore, investments carried out by the assessee through the PMS provider do not result in a gain assessable as business income. - Decision in favour of assessee Annual value of property u/s 23 under head house property - Assessee had declared its annual value at NIL by applying Sec.23(1)(c) on the ground that such property remained vacant during the year under consideration - Annual value of the property was adopted on the basis of fair rent of ₹ 20,000/- per month and after allowing statutory deduction of 30% u/s 24, income chargeable under the head house property was computed at ₹ 1,68,000/ - Held that:- As concluded from the facts in the case allowing the benefit of Sec 23(1)(c) to the assessee, it is for the assessee to establish that the property was intended to be let and it remained vacant in the absence of it being occupied by a tenant. Therefore, it cannot be made out that the property was “intended to be let out”. Appeal decides in favour of revenue. Disallowance of expenditure incurred on earning exempt income u/s 14A - Whether the provisions of Sec. 14A are applicable to the expenses incurred in the course of its business merely because earning dividend income when there was no material brought to show that incurred expenditure for earning dividend income which is exempted from taxation – Held that:- Following the decision in case of CCI Ltd (2012 (4) TMI 282 - KARNATAKA HIGH COURT) when assessee has not retained shares with the intention of earning dividend income and dividend income is incidental to the business of sale of shares, it cannot be said that the expenditure incurred in acquiring the shares has to be apportioned to the extent of dividend income so as to be disallowed. Appeal decides in favour of assessee
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