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2014 (1) TMI 1586 - HC - Income TaxEstimation of expenditure for disallowance u/s 14A - Held that:- The assessee has received the dividend income direct credit in bank account through NEFT, RTGS and also DEMAT Accounts - No human agency is involved in collecting these dividends and interest for which the assessee has to incur any expenditure - These aspects has not been taken note of and the notional expenditure is calculated pre modernization - When the assessee has not incurred any expenditure for realizing this income, the question of holding that 2% of the gross total income is an expenditure is unsustainable - Decided in favour of assessee. Depreciation on the loss incurred units of CANSTAR or revenue expenditure - Held that:- The object of purchasing the units is to gain public confidence and to mitigate the hardship that is caused to the public - The assessee has invested Rs.999.16 crores for purchase of units and only Rs.500.11 crores was realized on its redemption after maturity, thus, incurring a loss of Rs.499.05 crores - It is in the nature of an expenditure and assessee is entitled to the benefit of Section 37(1) of the Act - The claim of the assessee for depreciation on the basis of diminution of value of the capital asset or even loss sustained in the business would not be appropriate - The assessee would be entitled to the claim as expenditure incurred in the business because the entire amount was invested as commercial expediency with the intention of preserving their goodwill in the business - Decided in favour of assessee.
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