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2014 (1) TMI 1534 - AT - Income TaxIncome from sale of shares - Capital gains or business income - Held that:- The assessee has been investing in shares in earlier years and Revenue has accepted the same as income from capital gains - Following the Rule of Consistency the same should be accepted in this year also - In the absence of any material change, the Revenue should not have taken a different view - Decided against Revenue. Interest income - Income from business or income from other sources - Held that:- The assessee has been disclosing interest income consistently as business income - The department has also accepted the same and completed the assessment u/s 143(3) of the Act accepting interest income as business income for the AYs 2003-04, 2004-05 and 2005-06 - There is no change in circumstances of the year under consideration - The CIT(A) has rightly treated the interest income as business income and we confirm the same - Decided against Revenue. Applicability of Rule 8D - Held that:- Relying upon the decision in Godrej & Boyce Mfg. Co. Ltd. vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Rule 8D of the Rules as inserted by the I. T (Fifth Amendment) Rules, 2008 w.e.f. 24.3.2008 is prospective and not retrospective - Since the assessment year involved is 2007-08 therefore I hold that Rule 8D will not apply - In certain recent decisions Hon'ble ITAT Kolkata it has been held that expenses to the tune of 1% of the exempt income can be disallowed u/s. 14A - Decided against Revenue. Disallowance of interest payment u/s 14A - Held that:- The payment of interest amounting to ₹ 92,69,529/- has direct nexus and is directly attributable to a particular income, i.e., business income on shares sold held as stock-in-trade - The provisions of Rule 8D(2)(ií) are very clear that the expenditure on account of payment of interest would be covered in the said Rule only if it ís not directly attributable to any particular income or receipt - The interest payment cannot be considered under Rule 8D(2)(ii) - The CIT(A) has rightly deleted the addition - Decided against Revenue.
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