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2018 (5) TMI 956 - ITAT MUMBAITreat the long term as well as short term capital gain as such and not as business income as per CIT-A - Held that:- The assessee is maintaining two portfolios i.e. investment as well as trading. In the investment portfolio the shares are held as investments whereas in the trading portfolio the shares and securities are held as stock in trade. The assessee has duly classified the same in the shares into investment portfolio and trading segment. The assessee has used her own funds and no funds were used for the purpose of investments. Therefore, looking to the facts and circumstances of the case in totality, we do not find any defect or infirmity in the order of Ld. CIT(A). Addition u/s 14A - Held that:- It was not possible to make any income without expenses thereby ignoring the facts that the expenses claimed by the assessee in the P & L account are only to the extent of ₹ 2,24,354/-. Therefore, the arguments of the Ld. A.R. that disallowance cannot exceed actual expenses claimed by the assessee appear to be correct. Keeping in view the nature of business and facts of the case, we are of the view that disallowance of expenses attributable to earning of exempt income has to be based upon the quantum of expenses incurred by the assessee. We, therefore, deem it fit and reasonable to direct a disallowance @ 20% of total expenses i.e. ₹ 2,24,354/- as expenses attributable to earning of exempt income under Rule 81D(2)(iii) of the Rules.
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