TMI Blog2015 (1) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... earning the dividend income. Considering the facts of the case in totality and in the interest of justice and fair play, we direct the AO to restrict the disallowance to ₹ 11,565/- being the amount of dividend received during the year and delete the balance amount. - Decided in favour of assessee in part. Membership fee paid - capital expenditure or business expenditure - Held that:- In the decisions of the Hon’ble Supreme Court in the case of Techno Shares & Stocks Ltd.,(2010 (9) TMI 6 - SUPREME COURT OF INDIA), the Stock Exchange Membership Card has been treated as a capital expenditure on which the Hon’ble Apex Court has allowed depreciation. This decision directly go to the root of the fact in issues in hand before us. The dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer noticed that the assessee has shown dividend income of ₹ 11,565/-. The assessee was asked to explain why disallowance u/s. 14A r.w.Rule 8D should not be made. The assessee filed a detailed reply claiming that it has not incurred any expenditure on earning the said dividend income, further, it has not invested any borrowed funds. 3.1. The submissions of the assessee did not find any favour with the AO who proceeded by applying Rule 8D and computed the disallowance u/s. 14A at ₹ 1,42,894/-. While computing such disallowance, the AO considered the interest on borrowed funds at ₹ 31,09,479/-. Proceeding further, the AO noticed that the assessee has debited its profit and loss account by sum of ₹ 5.05 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of Bombay has held in the case of Reliance Utilities and Power Ltd. 313 ITR 340 that where both own funds and loan funds are utilized by the assessee, the presumption is that the investments have come from the own funds. However, at the same time, we cannot deny that no expenditures have been incurred for earning the dividend income. Considering the facts of the case in totality and in the interest of justice and fair play, we direct the AO to restrict the disallowance to ₹ 11,565/- being the amount of dividend received during the year and delete the balance amount. The assessee gets part relief for ground No. 1. 8. Ground No. 2 3 are inter-linked. The assessee claimed ₹ 5.05 lakhs being membership fee paid to the M/s. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbership fee as a capital expenditure set at rest the entire controversy upholding the expenditure of ₹ 5.05 lakhs as a capital expenditure, we restore this issue to the file of the AO to decide the claim of depreciation in the light of the decision of the Hon ble Supreme Court in the case of Techno Shares Stocks Ltd. (supra). The AO is directed to allow depreciation as per provisions of law. Ground No. 2 is dismissed and ground No. 3 is allowed for statistical purpose. 11. With ground No. 4, the assessee has claimed that the AO has not given credit of the TDS. We find that the Ld. CIT(A) has directed the AO to allow credit of TDS after due verification as per law. We, therefore, do not find any reason to interfere with the findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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