9911796707
TMI Blog2015 (12) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee filed the return of income on 30.10.2007 showing an income of Rs. 2,40,000/- and business loss of Rs. 1,24,48,564/-. The assessment was completed u/s 143(3) of the Act on 29.12.2009 by making an addition of Rs. 1,55,00,000/- and disallowance u/s 14A read with Rule 8D amounting to Rs. 15,03,031/-. The taxable income of the assessee after allowing brought forward loss was determined at Rs. 34,33,619/-. Against the said assessment order, the assessee preferred an appeal to the ld.CIT(A), who deleted the addition of Rs. 1,55,00,000/-, but, confirmed the disallowance u/s 14A amounting to Rs. 15,03,031/-. Against the said order of the ld.CIT(A), the assessee preferred an appeal to the ITAT Delhi Bench 'D' in ITA No.5197/Del/2011, wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock in trade. What is material is, whether there is any exempt income and expenditure incurred in relation thereto. In these circumstances, I am satisfied that the provision of section 14A is applicable upon the assessee, as no disallowance u/s 14A was made by the assessee although dividend income was claimed as exempt by him. In these circumstances and considering the Balance Sheet of the assessee, I hereby disallow a sum of Rs. 13,63,477/- being 50% of the Interest on Loans claimed by the assessee as disallowance u/s 14A of the Income Tax Act,1961. Since the assessee has furnished inaccurate particulars of income on this ground, penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 are being initiated separately. In view of abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sufficient funds of its own out of which investment was made in stock-in- trade as well as investment. During the year, assessee had rather sold the stock-in-trade which was decreased from Rs. 2.12 crore to Rs. 51.53 lac. Thus this is not a case where assessee had borrowed money for purchasing shares and paid interest thereon. However, Assessing Officer has made disallowance of 50% of the interest paid by the assessee which is unjustified. 11.2 I have also considered the case law cited by the assessee particularly the judgement of Jurisdictional High Court in the case of Maxopp Investment Ltd. & Ors vs CIT (2012) 347 ITR 272 (Del) and Karnataka High Court in the case of CCI Ltd. vs the Joint Commissioner of Income Tax (2012) 206 Taxmann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of sale of shares, it would be unjustified to apportion the expenditure incurred by the assessee in acquiring the shares, to the extent of dividend income and disallow the same u/s 14A. Hence the disallowance made by the Assessing Officer is not sustainable and therefore, is deleted. Accordingly, a relief of Rs. 13,63,477/- is allowed to the assessee." 5. Now, the Department is in appeal. 6. The ld. DR strongly supported the order of the AO and, further, submitted that the assessee made the investment and had not bifurcated the investment and stock-in-trade. Therefore, the addition was rightly made by the AO by making the disallowance u/s 14A of the Act. In her rival submissions, the ld. counsel for the assessee reiterated the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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