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2019 (4) TMI 42 - AT - Income TaxDisallowance u/s 14A - Expenditure incurred by way of payment of interest having direct link with the dividend income - Assessee company has purchased units from the mutual funds under the Dividend Reinvestment Plan and earned day to day dividend in the shape of units and value of the purchase account had increased by such units and the motive of the assessee company is clear to earn the dividend income - shares held as stock in trade - HELD THAT:- As relying on MAXOPP INVESTMENT LTD.case [2018 (3) TMI 805 - SUPREME COURT OF INDIA] the expenditure incurred in acquiring the shares will have to be apportioned. Also setting aside the disallowance under section 14 A of the Act in respect of the dividend earned on the shares held as stock in trade, because such shares were held during the business activity of the assessee and it is only by a quirk of fate that when the investee company declared dividend, those shares were held by the assessee, though the assessee has to ultimately trade those shares by selling them to earn profits. Though not the dominant purpose of acquiring the shares is a relevant for the purpose of invoking the provisions under section 14A of the Act, the shares held as stock in trade stand on a different pedestal in relation to the shares that were acquired with an intention to acquire and retain the controlling interest in the investee company. In the circumstances we are of the considered opinion that Application of Rule 8D to the facts of the case is not correct, hence, the addition on this account is hereby directed to be deleted. MAT tax credit u/s 115JAA - Disallowance of the MAT credit in respect of surcharge and cess - Held that:- We set aside the impugned order and remit the matter to the file of the Ld. AO for ascertaining the correct amount of MAT tax credit available to the assessee including of surcharge / cess and then allow tax credit as indicated in the decision of the Consolidated Securities Ltd. [2018 (7) TMI 1722 - ITAT DELHI]
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