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TMI Blog2015 (10) TMI 2581X X X X Extracts X X X X X X X X Extracts X X X X ..... king disallowance u/s.14A erroneously relying that the same were allowed in the previous year by his predecessor which is factually incorrect. 2. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the penalty on account of payment made to Stock Exchange without taking into account the fact that penalties which are mentioned as technical defaults are not merely compensatory but penalizing". 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of loss on unexpired contract on account of mark to market valuation of open positions in respect of futures incorrectly interpreting that the same have already been credited in the P&L Account. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this Tribunal. 3. We have heard the Departmental Representative (DR) and Authorised Representative (AR) of the assessee and perused the material available on record. 4. While restricting the disallowance made u/s 14A r.w. Rule 8D of the Income-tax Act, the CIT(A) observed as under: I have considered the facts of the case. I find that similar issue was there in A.Y. 2009-10 where my predecessor has directed the AO as under: "The amount of such expenditure is, therefore, required to be determined as per provisions of Rule 8D. However, in disallowing such expenses, the AO has considered gross interest of Rs. 41,51,351/-. It is seen that the appellant also received interest of Rs. 37,70,474/- and as such the appellant paid net interest o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Stock Exchange. These expenses are in the nature of payments towards violating the prescribed Rules/ Regulations, short/ partial collection of margins, non-maintenance of complete records, delay in payments of funds and securities, incomplete KYC forms, etc. which are main breach of contractual liability and non-adherence to proper procedure laid down by the Stock Exchanges, and are not for any infringement or infraction of any statutory law, and therefore, are not hit by Explanation to sec.37(1) of the Act. Further, BSE & NSE are not statutory bodies and hence, fines and penalties levied by BSE & NSE cannot be equated with statutory Rule or Law. Since, the facts and circumstances of this year are similar to that of AY 2009-10, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in club after office hours. In view o above and considering the case laws cited upon by the appellant, the addition made by the Ld. AO is unjustified and hence deleted. This ground of appeal is allowed. 8. The learned AR of the assessee relied upon the judgment of co-ordinate bench of ITAT, Mumbai in ITA No. 5072/2005 titled as Morgan Stanley India Securities Pvt. Ltd. Vs. ACIT dated 13.04.2011 wherein it was held as net interest considered for disallowing proportionate part of interest and following the same way, the ld. CIT(A) calculated the same and partly allowed the disallowance made u/s 14A r.w.r. 8D of the Act. So far as the deletion of penalty paid to the stock exchange is concerned, the same was paid by the assessee only for cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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