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Income-Tax Officer, Ward-6 (1) , Kolkata Versus M/s DTC Securities Ltd.

Addition U/s 14A - CIT(A) deleted the addition - Held that:- There is a categorical finding by CIT(A) that investment in share was made prior to procurement of loan and security deposit given to East Commercial Pvt. Ltd. of ₹ 11.9 crores. According to CIT(A), the entire loan has a direct nexus with the taxable income and he also noted that assessee does have sufficient funds for investment and loan amount have not been invested in the investment i.e. purchase of share and mutual funds. Onc .....

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s made to them were otherwise than for the purpose of business - CIT(A) deleted the addition - Held that:- We find that the genuineness of the claim has been verified by the AO in course of the remand proceedings. We further find from the facts of the case that the assessee has entered into agreement with the commission agents, and, the commission paid as per the terms of the agreement. We find from records that the assessee has filed complete details before the AO. The payments were made throug .....

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her hand, there is no material on record to show anything that could cast suspicion or doubt about the genuineness of the claim. In view of the above, there is no basis or justification for the disallowance made by the AO and CIT(A) has rightly deleted the disallowance made by AO. - Decided against revenue. - ITA No. 48/Kol/2013 - Dated:- 30-6-2015 - P K Bansal, AM And Mahavir Singh, JM For the Petitioner : Shri Sanjay, Addl. CIT-DR For the Respondent : Shri Pawan Kumar Agarwal, FCA ORDER Per Ma .....

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king the provision of Section 14A of the Act. For this, revenue has raised following ground No 1: "1.That Ld. CIT[A] has erred in law s well as on facts by deleting the addition of ₹ 13,41,749/- on account of U/s 14A." 3. Briefly stated facts are that the assessee has earned dividend income of ₹ 7,352/- on mutual fund and dividend of ₹ 40,678/- on shares investment, claiming the aggregated exempted income of ₹ 48,030/-. The Assessing Officer disallowed the expen .....

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Sheet {1/2 of [287003429 + 249363493] = ₹ 268182961} Rs.1,98,09,179xRs.1,81,65,028 Rs.26,81,82,961 Rs.13,41,749 ## Interest paid of ₹ 18909179 is considered as discussed in Para [04] below. [iii] Investment:- Investment as on 01.04.2008 Rs.2,09,93,107 Investment as on 31.03.2009 Rs.1,53,36,949 Rs.3,63,30,056 Average value of investment ½% of average value of investment = Rs.1,81,65,028 ½ % of ₹ 1,81,65,028 ₹ 90,825 Expenses disallowable u/s 14A Rs.14,88,522 .....

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n had direct nexus with the taxable income. The appellant had its own sufficient funds for the investment and the loan amount has not been invested in the investments. 6. However, there are other indirect expenses amounting to ₹ 13,43,931/- as per schedule 6 of the Tax Audit Report. The appellant has not disallowed any expenses on account of administrative and establishment expenses. The Assessing Officer has calculated the eddies as per Rule 8D since the appellant is unable to establish t .....

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element for the portfolio manager. The fixed administrative expenses could not be correctly calculated since in this case these expenses are spread over a large number of voluminous activities of the appellant. The expenses have to be computed at one-half per cent of the value of the investment which are very reasonable and appropriate in the facts of the appellant. 7. Rule 8D(20(iii) is still applicable in the case of the appellant. Section 14A(2) makes it abundantly clear that rule 8D is to b .....

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investment aggregating to ₹ 48,030/- as exempted income. The Assessing Officer has calculated disallowance @ 0.5% amounting to ₹ 90,825/-. The appellant has expenditure as Placement Fee on Mutual Fund of ₹ 50,000/-; expenses on share transactions of ₹ 1,798 and Interest Paid on Mutual Fund of ₹ 4,150 and thereby totalling to ₹ 55,948/-. The appellant has claimed these expenses in the Profit and Loss Account and has not disallowed on the basis that the said in .....

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wan Agarwal, Aurhorised Representative of the appellant stated on the order sheet I have no objection if disallowance of ₹ 1,46,773/- is retained u/s. 14A in this case, being direct expenditure of ₹ 55,948/- and 0.50% of average investments for ₹ 90,825/-.' The plea of the Authorised Representative is found to be fair, reasonable and as per the legal matrix of the case and is therefore,, accepted. 9. Therefore, the expenditure of ₹ 55,948/- and the 0.50% of average va .....

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rity deposit given to East Commercial Pvt. Ltd. of ₹ 11.9 crores. According to CIT(A), the entire loan has a direct nexus with the taxable income and he also noted that assessee does have sufficient funds for investment and loan amount have not been invested in the investment i.e. purchase of share and mutual funds. Once the this is the position, the same was put before to Ld. DR but he could not controvert the findings of CIT(A) that assessee has no funds available or the investment in sh .....

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ly stated facts are that AO disallowed the commission expenses of ₹ 80,48,713/- paid to Anchor Engineers Files. According to AO, no services were rendered by recipient of commission that M/s Sunrise Trading Corporation for the receipt of commission. Accordingly, he disallowed the commission expenses. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee by relying on immediate preceding years order of CIT(A) by observing in para 12 and 13 as under:- "12 .....

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36(2)/09- 10/Kol. Dated 26th November, 2010 by observing as under:- I have perused the assessment order and the remand report of the AO. I have also considered the submissions of the appellant. The AO disallowed the claim of commission on the ground that no services were rendered by the commission agents, and, that the payments made to them were otherwise than for the purpose of business. However, the genuineness of the claim has been verified by the AO in course of the remand proceedings. The a .....

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ices rendered has been mentioned in the agreement, and, the commission agents have also confirmed rendering of services to justify the claim of commission. On the other hand, there is no material on record to show anything that could cast suspicion or doubt about the genuineness of the claim. In view of the above, there is no basis or justification for the disallowance made by the AO; and, the same is directed to be deleted. The grounds raised by the appellant are liable to be allowed.' 13. .....

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ment year 2006- 07 which is sub judice before the Hon'ble ITAT. The addition has been deleted in the subsequent year on the basis of the Remand Report of Assessing Officer by the Ld. C.I.T.(Appeals)-XX, Kolkata in the case of M/s. Sunrise Trading Company. Therefore, in the facts and circumstances the addition of ₹ 80,48,713/- is deleted. These grounds of appeal are accordingly allowed and appellant gests relief of ₹ 80,48,713/-." Aggrieved, Revenue came in appeal before Trib .....

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