TMI Blog2014 (2) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... sets i.e. shares for more than twelve months, may be even for one day – thus, there is no need to interfere in the order of CIT(A) – Decided against Revenue. Disallowance of expenses u/s 14A of the Act – Held that:- CIT(A) restricted the disallowance - As the issue is covered u/s 14A of the Act only 1% disallowance is to be restricted but here, the assessee itself has disallowed a sum which is more than 1% - The entire addition made by AO is deleted – Decided in favour of Assessee. - I.T.A No. 1054/Kol/2012, C.O. No. 76/Kol/2012 - - - Dated:- 13-2-2014 - Shri Mahavir Singh, JM Shri Abraham P. George, AM,JJ. For the Appellant: Shri Niranjan Satpati, JCIT, Sr. DR For the Respondent: Shri D. S. Damle, FCA ORDER Per Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a capital asset as 'LTCG'." 3. We have heard rival submissions and gone through facts and circumstances of the case. We find that the AO has assessed the income of the assessee under the head Short Term Capital Gains at Rs.22,56,027/- arising from sale of shares as against the claim of the assessee that the same was Long Term Capital Gains. The AO was of the view that the assets held by the assessee were not more than 12 months. He recorded the following facts: "During the course of assessment the assessee was asked to furnish date-wise and script- wise details of capital gains. Perusal of such break up indicated that 201 units of Franklin India FLEXI CAP FUND (G) were purchased on 02.03.05 and were sold on 03.03.06. Again, 101 units o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore qualified for exemption u/s 10(38) of the Income Tax act. I also note that on somewhat analogous facts; my predecessor in the case of M/s Runit Investment Company Ltd in Appeal No. 577/CIT(A)-I/09-10 dated 30.09.2010 allowed similar claim of the assessee. For the reasons set out in the foregoing, threfore, I direct the AO to assess Rs.22,56,027/- as income from long term capital gains and allow its exemption u/s. 10(38) of the Income Tax Act." Aggrieved, now revenue is in appeal before us. 4. We have heard rival submissions and gone through facts and circumstances of the case. From the bare reading of the assessment order it is clear that the assessee has held the assets i.e. shares for more than twelve months, may be even for one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has earned tax free income i.e. exempted income at Rs.85,65,604/- in the form of dividend and LTCG. This assessment year is 2006-07 and Rule 8D of the I. T. Rules, 1962 will not apply. According to AO, the assessee has suo motu disallowed a sum of Rs.6,76,683/- while computing the income under section 14A of the Act for earning the exempted income. According to AO, it has expended a sum of Rs.15,15,013/-. These expenses are general in nature and hence he attributed the entire expenses to the exempted income thereby further disalloance of Rs.9,09,010/-. Aggrieved, assessee preferred appeal before CIT(A), who restricted the disallowance further at Rs.6,76,683/-. As the issue is covered, that u/s. 14A of the Act only 1% disa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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