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2012 (11) TMI 278 - AT - Income TaxExpenses in relation to exempt Income u/s 14A - Assessee submits that it had not incurred any direct expenditure. Assessee had earned dividend income, therefore, provision of sec. 14A is squarely applicable - CIT (A) is not correct in by directing the AO to recalculate the disallowance by following Rule 8D - AO is directed to compute the disallowance @ 2% of the exempt income instead of 04.6% which should meet the ends of justice. Business Income vs. Capital Gain – Following the decision of court in case of [C.I.T. Versus GOPAL PUROHIT 2010 (11) TMI 222 - SUPREME COURT OF INDIA] held that:- Delivery based transactions should be treated as those in the nature of investment transactions and the profit received therefrom should be treated either as short term or, as the case may be, long term capital gain,depending upon the period of the holding. – Further, the principle of res -judicata is not attracted since each assessment year is separate in itself. The Tribunal held that there ought to be uniformity in treatment and consistency when the facts and circumstances are identical, particularly in the case of the assessee - assessee’s investments leading to earning of profit in hand could not be termed as business income - issue is decided in assessee’s favour.
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