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2021 (2) TMI 1204 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - As per AO allow only that expenditure which is relatable to earning of income and therefore expenses which are relatable to earning of exempt income have to be considered for disallowance, irrespective of the fact whether any such income has been earned during the financial-year or not - HELD THAT:- As AR submitted that the assessee has received only ₹ 1,79,466/- as the dividend income and contended that the disallowance u/s. 14A of the Act even if made cannot exceed ₹ 1,79,466/-. In the light of the aforesaid discussion and the facts taken note by the AO, we note that even if the computation is made by applying Rule 8D, the disallowance cannot exceed the dividend income as held by the Hon’ble High Courts. In such a scenario, we are restricting the disallowance at ₹ 1,79,466/- in place of ₹ 9,37,263/- as made by the AO. This ground of Revenue appeal is partly allowed. Derivative loss v/s business loss - setting off of share trading loss which is deemed speculative loss with derivative income and other business income - AO denying the assessee’s claim of set off of the said loss from income of business of dealing in shares - HELD THAT:- In this case on hand, there is no doubt that the assessee is a company and is in the business of purchase and sale of shares of other companies. And the deeming provision u/s. 73 of the Act is attracted since in this case there is net loss of assessee’s business of purchase and sale of shares of other companies - since the assessee transacted in sale & purchase of shares of other companies, by delivery as well as non-delivery (transactions of derivatives) are not hit by Sec.43(5) of the Act and hence the aggregation of the brokerage, share trading profit and loss from derivative transactions should be done before application of the Explanation to Sec.73. The assessee had treated the entire activity of brokerage, purchase and sale of shares which comprised of both delivery based and non-delivery based trading as one composite business before the application of deeming provision contained in Explanation to Sec.73 of the Act and accordingly, claimed set off of the loss incurred in non-delivery based trading (derivative) with profit derived from delivery based share trading and brokerage which is legally valid. Therefore, we confirm the action of the Ld. CIT(A) and dismiss this ground of appeal of the revenue. Addition u/s. 36(1)(va) read with section 2(24)(x) - employees contribution to Provident Fund deposit beyond the due date prescribed under the PF Act - HELD THAT:- We note that the assessee has deposited the employees’ contribution to Provident Fund before filing of return of income which fact has not been assailed by the revenue before us. Since the assessee has deposited the contribution amount to the Provident Fund before filing of return of income, the Ld. CIT(A) relying on the decision of the Hon’ble jurisdictional High court in the case of CIT Vs. Vijayshree Ltd. [2011 (9) TMI 30 - CALCUTTA HIGH COURT] has allowed the appeal of the assessee, which decision is binding on this Tribunal and at the time of hearing before us, no other order of the Hon’ble Supreme Court has been cited reversing this view of the Hon’ble High Court. Therefore, we confirm the order of the Ld. CIT(A) and dismiss this ground of appeal of the revenue.
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