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2015 (10) TMI 2581 - ITAT MUMBAI

2015 (10) TMI 2581 - ITAT MUMBAI - TMI - Restricting the disallowance made u/s 14A r.w. Rule 8D - Held that:- It is seen that the predecessor has directed the AO to consider net interest paid for disallowance u/s 14A. Following the predecessorís order as mentioned in preceding para, the AO is directed to consider only net interest paid for working disallowance u/s 14A of the Act. This ground of appeal is, thus, partly allowed. - Addition on account of penalty paid to stock exchange - Held th .....

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e 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, I have no reason to differ with view taken by my predecessor. Hence, the penalty disallowed by the AO is .....

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The Honíble Delhi High Court in CIT(A) vs. Nestle India reported by (2007 (4) TMI 180 - DELHI HIGH COURT) held that (Even though there was no specific finding that the payment was made by the assessee for improving its business there was an implicit acknowledgement that expenses incurred by the assessee were for business purposes. The assessee was entitled to deduction as claimed). Hence the addition made on account of club expenses which was deleted by ld. CIT(A) is also does not require any in .....

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e Ld.CIT(A) erred in directing the A.O. to consider only net interest paid, for working 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 compe .....

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it to be for the interest of the business without taking into consideration the personal element involved". 5. "On the facts and in the circumstances of the case and in law, the impugned order of the Ld.CIT(A) is contrary to law and consequently merits to be set aside and that of the Assessing Officer be restored". 2. Brief facts of the case are that the assessee filed his return of income on 28.09.2010 declaring total income of ₹ 1,52,24,770/-. The return of income was sele .....

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T(A). The ld. CIT(A) in its order dated 18.07.2013 restricted the claim of disallowance at ₹ 19,97,092/-, deleted the addition of stock-exchange penalty, upheld the addition u/s 94(7), deleted the notional loss in respect of open position in the F & O and further deleted the addition of expenses incurred at club made by AO, against which the present appeal is filed by the Revenue before this Tribunal. 3. We have heard the Departmental Representative (DR) and Authorised Representative ( .....

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rest of ₹ 41,51,351/-. It is seen that the appellant also received interest of ₹ 37,70,474/- and as such the appellant paid net interest of ₹ 3,80,877/-. In the case of Morgan Stanley India Securities Pvt. Ltd. (ITA No. 5072/M/2005 and 6774/M/2008, it is held that net interest should be considered for disallowing proportionate part of interest. Hence, I direct the AO to consider net interest of ₹ 3,80,877 for disallowance u/s 14A which works out to ₹ 2,01,728/-. Thu .....

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net interest paid for working disallowance u/s 14A of the Act. This ground of appeal is, thus, partly allowed. 4. The next ground which was raised before the CIT(A) was an addition of ₹ 22,700/- on account of penalty paid to stock exchange and while dealing with this issue the CIT(A) observed as under: I have considered the facts of the case. It is seen that identical issue was there in AY 2009-10 where my predecessor vide order No.CIT(A)- 8/Cir.4/172/2010-11 dated 30/12/2011 had allowed t .....

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nd 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, I have no reason to differ with view taken by my predecessor. .....

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and the CIT(A) while considering this ground observed as under: I have considered the facts of the case. In find from the P & L A/c that the appellant had already credited the amount of ₹ 9,593/- to the P & L account. Thus, by adding the same amount again in the computation of income, the AO has taxed twice the same amount, I, therefore, direct the AO to delete this addition of ₹ 9,593/- on account of F & O transaction. This ground of appeal is allowed. 7. We have furthe .....

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