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2016 (12) TMI 242 - AT - Income TaxIncome from share transactions - Nature of income - Short Term Capital Gains or income from business - Held that:- As decided in assessee's own case for AY 2007-08 the issue has been decided against the assessee. We, therefore , respectfully following the decision of the coordinate bench uphold the orders of authorities below in treating the STCG as income from business. Disallowance u/s 14A read with Rule 8D - Held that:- We find that in the case of assessee the exempt income from dividend was ₹ 40,000/- during the year. We are in agreement with the arguments advanced by the ld.AR that the disallowance u/s 14A r.w.r 8D should not exceed the exempt income earned during the year. The case of the assessee is also supported by the decisions referred and relied to by the ld AR in which it has been held that disallowance cannot be exceed the amount of exempt income. We set aside the order of the ld. CIT(A) and direct the AO to delete the addition of ₹ 18,51,670/- by sustaining the disallowance to the extent of ₹ 40,000/- only. Confirmation of disallowance on account of car expenses, depreciation of motor car, telephone expenses, conveyance allowance and travelling expenses - Held that:- We find that the adhoc disallowances has been made by the AO at the rate of 20% of the total expenses in respect of car expense, depreciation , telephone, office expenses, conveyance, miscellaneous expense, foreigen travel and other travelling. The ld CIT(A) reduced qua car , depreciation and telephone to 1/6th whereas the disallowance in respect of office expense, conveyance and miscellaneous was retained at 10% and the disallowance on account of foreign travel and other travel was confirmed. . Having seen the nature of expenses incurred , we find that the basis of confirmation is tribunal decision and CIT(A) decisions in the case of the assessee himself. Further we find that disallowances were purely on adhoc basis. We are therefore of the considered opinion that it would be justified and reasonable if the disallowances is restricted to 10% of the total expenses Addition on account of commission income on the basis of AIR information available with the department - Held that:- We find from the reconciliation statement that most of the entries attributing to the difference between the books of the assessee and Form 26A were duly recorded by the assessee either in the preceding or succeeding year. We, therefore, consider it fit and proper to restore the mater to the file of the AO to verify the facts and decide the matter on the basis of reconciliation statement filed by the assessee as per fact and law. This ground is allowed for statistical purposes. Disallowance on account of foreign travel expenses - Held that:- As find from the record that the ld.CIT(A) while confirming the action of AO observed that the assessee failed to demonstrate that the expenses of ₹ 2000/- were incurred wholly and exclusively for the purpose of business. We do not find any infirmity in the findings of the ld.CIT(A) and accordingly same is confirmed on this issue Disallowance of travelling expenses - Held that:- CIT(A) upheld the action of the AO on the ground that the assessee failed to prove that one of his employees visited Shirdi for cracking the business deal with one of the client but relevant documents have not been submitted as to which employee was sent to Shirdi, to whom did he meet and what business purpose was served. Since, the assessee failed to controvert the findings of the AO before the ld.CIT(A) and here also no contrary documents were submitted by the ld.AR to disprove the finding of the ld.CIT(A), we confirm the findings of the lower authorities
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