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2022 (4) TMI 968 - AT - Income TaxCorrect head of income - Treatment of the income from the sale of mutual funds and shares - capital income or income from business - principles of res judicata - HELD THAT:- As in this case, we note that the revenue has consistently accepted the stand of the assessee that it is a trader of shares and mutual funds from AYs 2005-06 to 2007-08 and the AO deviated only in AY 2008-09 which has been reversed by the Ld. CIT(A) by passing the impugned order. Meanwhile, the AO had again treated the assessee’s action as capital gain from investments for AY 2011-12 which was reversed by the Ld. CIT(A) and held it as business income which action of the CIT(A) has not been challenged by the AO, so the finding of Ld CIT(A) that assessee is a trader of of shares and mutual funds crystallises. Therefore, applying the principle of rule of consistency as held by the Hon’ble Supreme Court in the case of Radhesoami Satsang [1991 (11) TMI 2 - SUPREME COURT] since the fundamental facts permeating in the earlier years have not changed, and when certain position has been accepted by the department, then without any change in law, the consistent position/finding cannot be allowed to be changed - Decided in favour of assessee. Disallowance of expenditure by invoking section 14A read with Rule 8D(2)(ii) & (iii) - HELD THAT:- The ratio decidendi which emerges is that, it was qua the assessee’s covered by the Board Circular No. 18 of 2015 viz., cooperative societies & banks (to whom Section 80P was applicable), that the Hon’ble Supreme Court NAWANSHAHAR CENTRAL CO-OPERATIVE BANK LTD. [2005 (8) TMI 28 - SC ORDER] held that the provisions of disallowance u/s 14A cannot be applied to such assessee’s. In the facts of the present case, the assessee is also a cooperative society which is engaged in the business of providing financial assistance to its members and is eligible for deduction u/s 80P of the Act. In our considered view therefore the above the judgment rendered in case of State Bank of Patiala [2017 (5) TMI 843 - PUNJAB AND HARYANA HIGH COURT] and South Indian Bank Ltd [2021 (9) TMI 566 - SUPREME COURT] is squarely applicable to the facts of the present case. We thus hold that the provisions of Section 14A cannot be applied to the assessee cooperative society and accordingly the AO is directed to delete the disallowance so made u/s 14A of the Act. Accordingly, the second and third grounds of appeal of the revenue stands dismissed and the ground in cross appeals of the assessee is allowed.
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