TMI Blog2015 (11) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... be fulfilled simultaneously. As all the three conditions of section 94(7) are not fulfilled, we hold that loss of sale of securities to the extent of dividend income cannot be disallowed or ignored invoking provisions of section 94(7) of the Act in the case of the assessee. Same view has also been upheld in the case of CIT Vs. Alka Bhosle [2010 (6) TMI 16 - BOMBAY HIGH COURT]. There is no error in the findings of the CIT(A) on this issue. - Decided against revenue. Disallowance of expenses u/s 14A - CIT(A) deleted part disallowance - Held that:- The disallowance upheld by the ld. CIT(A) is justified in view of the nominal expenses incurred by the assessee towards earning of interest from tax free bond and other exempted income. Therefore, no interference is required in the findings of the CIT(A) on this issue. The ground of the Revenue is accordingly dismissed. Difference in tax deducted and interest recorded in the TDS certificate - Held that:- As it is a matter of verification of the TDS certificate and if TDS has been deducted in excess by a particular deductor and the same has been deposited in the Government Account, the assessee cannot be faulted for that. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome tax (Appeals) has erred in law in reducing the disallowance of expenses from Rs.l,33,682/- to ₹ 50,000/- in view of the provisions of section 14A the Income tax Act, 1961. 4. The assessee in ITA No. 216/Del/2009 has raised following grounds:- l. That the Assessing Officer has erred in law facts in disallowing business expenditure to the extent of ₹ 3,99,492/- by wrongly linking it with Tax free interest income of the assessee and the Ld C.I.T (Appeals) has un-judiciously confirmed the same to the extent of ₹ 50,000/-. 2. That the Assessing officer has arbitrarily without any basis disallowed interest expenses of ₹ 4,02,772/- and the Ld C.I.T (Appeals) has failed to properly consider and adjudicate the same. 3. That the Assessing officer without properly appreciating the factual position has arbitrarily increased the interest income of the assessee by ₹ 9,15,192/- and the Ld C.I.T (Appeals) has erred in confirming the same. 5. Now, first we take up the Revenue‟s appeal in ITA No.196/Del/2009. 6. The facts in brief as culled out from the orders of the lower authorities are that the assessee was engaged in sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been disallowed invoking section 94(7) of the Act by the ld. AO, which is not applicable in the case of the assessee, being purchase of mutual funds under reference beyond three months from the record date of dividend, and therefore the ld.CIT(A) has rightly allowed the loss as per finding given at page 6 of his order . The ld.AR also relied on the judicial pronouncement reported in 325 ITR 550 (Bombay), 310 ITR 421 (Bombay) and 325 ITR 535 (Del). 9. We have heard the rival submissions and perused the material on record including the orders of the lower authorities. The issue which arises for our consideration in ground No.1 of the Revenue, is whether the provisions of section 94(7) are applicable in respect of loss claimed by the assessee. For the sake of clarity, the provisions of section 94(7) of the Act are reproduced as under:- Where- (a) any person buys or acquires any securities or unit within a period of three months prior to the record date; (b) such person sells or transfers- (i) such securities within a period of three months after such date; or (ii) such unit within a period of nine months after such date; (c) the dividend or inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s challenged the action of the CIT(A) in reducing disallowance of expenses u/s 14A of the Act from ₹ 1,33,682/- to ₹ 25,000/-. The facts in this regard are that the assessee, alongwith taxable income of ₹ 36,89,164/- shown interest income of ₹ 38,38,034/- on tax free bond, which was claimed as exempted. The assessee also claimed total expenditure of ₹ 3,62,134/- in profit and loss account. The ld.AO disallowed expenditure of ₹ 1,33,682/- in terms of section 14A of the Act, out of the total expenses of ₹ 3,62,134/- claimed by the assessee in profit and loss account, in proportion of interest income from tax free bond to the total income. Before the CIT(A) the assessee submitted that no expenses were incurred in respect of earning tax free interest income except expenses on receiving of cheques of tax free income on half yearly or annual basis and deposit of the same into the bank and also placed reliance on the cases of Jubilant Enpro Ltd. Vs. CIT (2007) 12 SOT 194 (Delhi) and CIT Vs. Eicher Ltd. (2007) 160 Taxmann 80 (Mad). After considering submissions of the assessee, the CIT(A) reduced the disallowance from ₹ 1,33,682/- to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. The claim of the assessee that the TDS certificate issued by Neelachal Ispat Nigam Limited , Bhubaneswar has been given in excess by ₹ 8,45,753/- was not accepted by the ld. AO. The ld. CIT(A) confirmed the action of the ld.AO by holding that the assessee has claimed excess TDS credit therefore, interest to the extent of TDS claimed was taxable in the hands of the assessee. 22. At the time of hearing before us, the ld. AR submitted that matter may be restored back to the file of the ld. AO for verification of TDS certificate issued by the Neelachal Ispat Nigam Limited‟. On the other hand, the Sr. DR supported the order of the lower authorities. 23. We have heard the rival submission and perused the material on record and we are of the view that it is a matter of verification of the TDS certificate and if TDS has been deducted in excess by a particular deductor and the same has been deposited in the Government Account, the assessee cannot be faulted for that. In view of the above, we remit this matter back to the file of ld.AO and direct him to verify the facts of tax deducted and interest recorded in the TDS certificate. The ld. AO may also verify the TDS and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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