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2019 (1) TMI 1330 - AT - Income TaxCorrect Head of income - Treating the long term capital gain shown from sale of land as business income - Held that:- This issue becomes a binding judicial precedent and no contrary view can be taken in this year. Moreover when in all the years, the assessee has been showing the land which is in dispute as a part of fixed assets which stood accepted year after year as an investment / fixed assets, then sale of such land will only give rise to capital gain chargeable u/s 45(2). Thus, the order of the AO and CIT (A) in treating it as a business income is reversed and the assessee’s claim for taxability of such gain on sale of land under the head capital gain is affirmed. In the result, ground raised by the assessee on this score is allowed. Addition u/s 40(a)(ia) on account of non deduction of TDS on guarantee commission paid to Bank - Held that:- On perusal of the CBDT Circular No. 56/2012 it is seen that CBDT has clarified that no TDS is required to be deducted on bank guarantee Commission, etc. Such a circular was brought to reduce the hardship and the compliance cost of the assessee. Once a benevolent circular has been issued to remove the hardship for the assessee then it cannot he held that any such payment made prior to the said circular which was causing hardship to the assessee should continue. It is a well settled proposition that CBDT Circular removing the hardship in favour of the assessee has to be treated as retrospective and accordingly, we hold that no disallowance u/s 40(a)(ia) can be made for non deduction of TDS. In the result this issue is decided in favour of the assessee. Disallowance u/s 14A - Held that:- Admittedly there is no dividend on exempt income earned by the assessee and accordingly no disallowance u/s 14A can be made in view of the issue in the case of Cheminvest vs. ITO. [2015 (9) TMI 238 - DELHI HIGH COURT] wherein as held that once there is no exempt income earned by the assessee, then no disallowance u/s 14A can be triggered. Accordingly, in view of the binding judicial precedent in the case of Cheminvest Ltd. (SUPRA), we hold that in absence of any exempt income earned by the assessee, no disallowance can be made u/s 14A. Thus, this issue is allowed in favour of the assessee.
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