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2014 (12) TMI 1384 - AT - Income TaxDisallowance u/s 14A - As per DR assessee to prove that a particular item of expenditure was incurred for earning taxable income and hence should not be disallowed u/s 14A - HELD THAT:- The assessee claims that the expenditure on interest, is incurred for the purpose of earning interest income but no evidence is lead by the assessee to prove this claim. Similarly on the issue of other expenses no evidence is lead to demonstrate that a particular expense cannot be said to have been incurred in relation to earning the income, which is not part of total income. Under these circumstances we are unable to accept the plea of the assessee. Assessee argued that the AO has not recorded satisfaction that the computation of disallowance u/s 14A by the assessee is wrong. We find that the satisfaction is discernible from para 2 of the assessment order, where the AO has not agreed with the manner in which the assessee applied Rule 8D and has computed the disallowance in his own way. This was after considering the detailed reply given by the assessee on 28.12.2011. Hence these arguments of the Ld.Counsel is dismissed as devoid of merit. CIT(A) has restricted the net disallowance u/s 14A. We are of the view that the disallowance has to be recomputed under Rule 8D (2)(ii). Thus for this limited purpose we set aside the matter to the file of the AO for computing the disallowance. Disallowance of claim of short term capital loss - assessee has submitted that right to obtain shares is an asset and forfeiture of the same is, extinguishing of a right and hence covered u/s 2(47)(ii) of the Act - HELD THAT:- As decided in SHRI CHAND RATAN BAGRI [2010 (1) TMI 123 - DELHI HIGH COURT] held that forfeiture of the convertible warrant amounted to a transfer within the meaning of s.2(47) - A share in a company is nothing but a share in the ownership of the company. While the right of the assessee to share in the ownership of the company Stands extinguished on account of the forfeiture, the company, with all its assets, continues to exist. The forfeiture only results in one less shareholder. It is not as if the asset in which a share was being claimed was also extinguished - Decided against revenue.
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