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2021 (7) TMI 622 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Theory of dominant purpose in making investment in shares - Difference between 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 - HELD THAT:- As decided in own case [2019 (1) TMI 1654 - ITAT DELHI] also confirmed by HC [2019 (11) TMI 342 - DELHI HIGH COURT] relying on Maxopp Investment Ltd vs. CIT [2018 (3) TMI 805 - SUPREME COURT] whenever dividend is declared by the investee company that would necessarily be earned by the assessee and the assessee alone. Therefore, even at the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stock-in-trade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes up in order to earn profits. Issue held in favour of the respondent assessee that it had earned the revenue on the shares held as stock in trade only by a quirk of fate. Therefore, clear that though not the dominant purpose of acquiring the shares is a relevant for the purpose of invoking the provisions under section 14 A 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. We, therefore, while respectfully following the above decision do not find any illegality or irregularity deleting the addition made by the Ld. AO under rule 8D (2) (ii) of the Rules. - Appeals of the revenue are dismissed. Disallowance made by the AO out of contribution to Punjab and Sind Bank Employees Pension Fund Trust - HELD THAT:- As decided in own case [2019 (1) TMI 1654 - ITAT DELHI] issue was decided in of the assessee wherein it was held that similar expenses were allowed in the earlier assessments made under section 143(3) of the Act and the decision of Delhi ITAT in the case of DCIT vs Ranbaxy Laboratories Ltd [2009 (6) TMI 126 - ITAT DE LHI-I]wherein the expenses towards provision for pension fund were held to be allowable expenses and section 43B has no application, is applicable. The fact that the assessee had actually contributed/paid the amount to pension fund makes the case of the assessee even stronger. Following the above orders, Ld. CIT(A)held that the addition his score has to be deleted. - Decided in favour of assessee.
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