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2016 (4) TMI 657 - ITAT MUMBAI

2016 (4) TMI 657 - ITAT MUMBAI - TMI - Disallowance u/s u/s 14A r.w. Rule 8D(2)(iii) - Held that:- The facts as emanate from the record are that the assessee earned dividend income of ₹ 75,150/- which was exempt u/s 10(34) of the Act. As can be seen from the impugned order, the assessee had in fact submitted before the Ld.CIT(A) that she credited the exempt dividend income to her capital account for the relevant period and had claimed expenditure therein on account of delivery charges (Rs. .....

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the factually erroneous conclusion that no expenditure was debited in respect of the earning of the assessee’s exempt dividend income, to make the disallowance u/s 14A r.w. Rule 8D; which was not warranted. We agree with the plea of the assessee that since it had already claimed expenditure incurred (supra) for earning the exempt dividend income of ₹ 75,150/-, the further disallowance of ₹ 34,292/- made by the Assessing Officer u/s 14A r.w. Rule 8D was not called for - Decided in fa .....

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3479 /MUM/2013 - Dated:- 24-2-2016 - SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOSAIN (JM) For The Appellant : Shri. Rajiv Khandelwal For The Respondent : Shri. Vikram Batra PER JASON P. BOAZ, AM This appeal by the assessee is directed against the order of the CIT(Appeals)- 23, Mumbai dt. 04/03/2013 for Asst. year 2008-09. 2. The facts of the case, briefly, are as under:- 2.1 The assessee, an individual engaged in the speculation of shares and trading in derivatives in the year under considerati .....

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/2010 for Asst. year 2008-09, the assessee preferred an appeal before the CIT(Appeals)-23, Mumbai. The Ld. CIT(A) dismissed the assessee s appeal vide the impugned order dt. 04/03/2013. 3. The assessee, being aggrieved by the order of the CIT(Appeals)-23, Mumbai dt. 04/03/2013 for Asst. year 2008-09 has preferred this appeal before the Tribunal raising the following grounds:- 1. The Commissioner of Income-tax (Appeals)-23, Mumbai (hereinafter referred to as the CIT(A)) erred in upholding the act .....

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me is not in accordance with the prescription of section u/s 14A read with rule 8D. 2. The CIT(A) erred in upholding the action of the Assessing Officer in treating short-term gains of ₹ 3,41,303/- as business income. The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in holding the capital gains arising on sale of short-term capital assets as business income and hence, the same i .....

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ecided the same. 4. Ground No: 3 4.1 At the outset of the hearing, the Ld.AR for the assessee submitted that the assessee is not pressing this ground in this appeal. In view of this ground no. 3 being not pressed, the same is rendered infructuous and is accordingly dismissed. 5. Ground No. 1- Disallowance u/s u/s 14A r.w. Rule 8D(2)(iii) ₹ 34,292/- 5.1.1 In this ground, the assessee assails the impugned order contending that in the factual matrix of the case, the Ld. CIT(A) ought not to ha .....

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disallowance u/s 14A r.w. Rule 8D (2)(iii) on the erroneous observation that the assessee has not shown any expenditure, as having been incurred for earning of the said dividend income. It is contended that the assessee had submitted before the authorities below that all the expenses related to the earning of the exempt dividend income were debited to the assessee s capital account and therefore the same was not debited to the profit and loss account which pertained only to derivative transactio .....

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n account of delivery charges of ₹ 1,519/-, demat charges of ₹ 10,621/-, stamp charges of ₹ 7,577/- and security transactions charges of ₹ 72,415/- which it was submitted are to be attributed to the earning of the aforesaid exempt dividend income. The Ld. AR submitted that it is the aforesaid factually erroneous observation of the authorities below that led to the unwarranted disallowance of ₹ 34,292/- made u/s 14A r.w. Rule 8D(2)(iii), which ought to be deleted. 5. .....

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relevant period and had claimed expenditure therein on account of delivery charges (Rs.1,519/-) , demat charges (Rs.10,621/-) , Stamp charges (Rs. 7,577/-) and Securities transaction (Rs. 72,415/-) charges (details placed at pg. 7 of paper book) and it was in these circumstances that no separate claim was put forth in the profit and loss account which reflected the derivative transactions of the assessee. In the factual matrix of the case, as laid out above, we concur with the averments of the .....

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upra) for earning the exempt dividend income of ₹ 75,150/-, the further disallowance of ₹ 34,292/- made by the Assessing Officer u/s 14A r.w. Rule 8D was not called for in the facts and circumstances of the case and accordingly delete the same. Consequently ground no.1 of the assessee s appeal is allowed. 6. Ground No. 2 6.1 In this ground, the assessee assails the impugned order contending that the Ld. CIT(A) ought not to have upheld the action of the Assessing Officer in holding th .....

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the Assessing Officer to assessee the gain on sale/purchase of shares at STCG. only and not as business income. The Ld. AR also submitted that the assessment in the case on hand for A.Y. 2003-04 and 2004-05 were completed u/s 143(3) of the Act wherein the Assessing Officer has accepted the STCG. declared by the assessee. In A.Y. 2005-06, the assessee s return was accepted u/s 143(1) of the Act. 6.2 Per contra, the Ld. DR for revenue placed strong reliance on the orders of the authorities below. .....

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