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2020 (11) TMI 64 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - HELD THAT:- In the case of the assessee own case [2017 (5) TMI 1745 - ITAT MUMBAI]assessee has incurred administrative expenses purely for administration of its affairs. We do not agree with the submission of Ld. AR that assessee has not incurred any expenditure and not warranted to remit this issue back to AO. The investment does require constant monitoring even though it is made within the group concern. Sometimes, the method applied as per rule 8D(2)(iii) gives absurd result, like the disallowance is more than the actual administrative expenses. We are directing AO to determine the total administrative expenses and also determine the total income earned by assessee including taxable and exempt income, apply the ratio of income to determine the administrative expenses and can be apportioned to exempt income. Simultaneously, calculate 0.5% of the investment as per rule 8D(2)(iii) of the rule, in applying the rules, he should consider only those investments which has actually earned dividend /exempt income. Then compare the both method of calculation and in order to apply provision of section 14A, he should consider the amount calculated above said two methods whichever is less. Accordingly, ground no. 1 raised by assessee is allowed for statistical purposes. TDS u/s 194J/194H - disallowance under section 40(a)(ia) in respect of commission on credit card companies paid to various banks for non-deduction of tax at source - HELD THAT:- Since facts of the case are exactly similar [2017 (5) TMI 1745 - ITAT MUMBAI] for which we have already given our finding. Accordingly the disallowance made by the Assessing Officer cannot be sustained and the Order of the CIT (Appeals) deleting the aforesaid disallowance, is upheld. Accordingly these grounds stands dismissed. Addition of amount forfeited by assessee on share warrants u/s 43(5) - HELD THAT:- As decided in own case[2017 (5) TMI 1745 - ITAT MUMBAI] basic nature of the transaction relates to raising of capital through convertible warrants. The amount forfeited on account of non payment of subsequent amounts cannot be treated as a income of the assessee in view of the various judicial pronouncements as well as the basic nature of the receipt. Thus, we hold that amount received on account of forfeiture of amount due to non payment towards warrants issue has to be treated as capital receipt and since the assessee has also transferred it to the capital reserve account in the balance sheet, the amount cannot be taxed as income. AO has observed in the assessment order that this addition should be treated as income from other sources as the assessee has become richer but the Departmental Representative could not throw any light on this aspect. It solely indicates that AO was not certain about the nature of these receipts. Thus, considering the above facts, we come to the conclusion that the nature of receipt in this case has clearly been established as being the capital receipt. The provision of Income Tax Act does not provide for taxation of such capital receipt, even if it is forfeiture of amount.- Decided against revenue.
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