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M/s Cosmos International Ltd. Versus ITO, Ward 6 (3) , New Delhi

2017 (9) TMI 378 - ITAT DELHI

Addition u/s 14A - Held that:- If there is no exempt income, disallowance u/s 14A not to be made. See Cheminvest Ltd. Vs CIT [2015 (9) TMI 238 - DELHI HIGH COURT]. - Loss on sale of mutual funds - capital loss OR business loss - mutual funds held as stock in trade - Held that:- It is undisputed fact that the loss has been incurred during the normal course of the business. Since the assessee's only source of income was his interest and in this view the loss incurred on the sale of mutual fund .....

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claimed by the assessee. The same stand was followed by the assessee in the earlier years and there is no addition made by the AO in the earlier and succeeding years. Thus addition deleted. - Assessee appeal allowed. - I.T.A. No. 6059/DEL/2015 - Dated:- 6-9-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Sh. Ved Jain, Adv. & Sh. Ashish Chadha, CA For The Department : S h . Shravan Gotru, Sr. DR ORDER PER H.S. SIDHU : JM Assessee h .....

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ity of being heard in clear violation of principle of natural justice. (ii) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in passing an order ex-parte despite the fact that the assessee was prevented from appearing because of the reasons beyond the control of the assessee. 3. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of the AO in making disallowance of an amo .....

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s against business loss. (ii) That the said disallowance has been confirmed despite the fact that the loss is revenue in nature, incurred during the normal course of business of the assessee. 5. The appellant craves leave to add, amend or alter any of the grounds of appeal. 2. The brief facts of the case are that Assessee had filed the return declaring income of ₹ 27,84,690/- on 29.9.2012. The case of the assessee was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred .....

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ems and also doing Commodity Business in Future Trading. During the course of assessment proceedings, it was observed that the assessee company has made investment in Mutual Funds. Assessee was asked to provide the details of disallowance u/s. 14A read with Rule 8D of the I.T. Rules, 1962. In its reply dated 5.3.2015, assessee simply stated that no income has been earned on investments and the additions made on similar grounds has been deleted by the higher authorities and hence, no disallowance .....

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on perusal of balance sheet filed by the assessee company, it was observed that the assessee was having investment in Mutual Fund amounting to ₹ 1,50,00,000/- at on 31.3.2011 which were sold during the year and on which loss of ₹ 29,82,952/- has been incurred and claimed by the assessee as revenue expenses. Assessee was asked to provide the details of expenses claimed in P&L account in excess of ₹ 1 lac with evidence of TDS deducted thereon. In reply to the same, the asses .....

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dated 13.3.2015. 3. Aggrieved with the assessment order dated 13.3.2015, the assessee preferred an appeal before the Ld. CIT(A), who vide impugned order dated 24.8.2015 has dismissed the appeal of the assessee. 4. Against the impugned order dated 24.8.2015, assessee has filed the Appeal before the Tribunal. 5. At the time of hearing, Ld. Counsel of the assessee with regard to disallowance of ₹ 37,500/- made u/s. 14A has stated that this issue is squarely covered by the decision of the Hon .....

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TR 306 (SC), because the entire income of the assessee include interest on securities. He further stated that in earlier years and in succeeding years, there is no addition made by the AO. Thus, the addition made by the AO and confirmed by the Ld. CIT(A) may be deleted. 6. On the contrary, Ld. DR relied upon the orders of the authorities below. 7. We have heard both the parties and perused the records especially the impugned order. We find that in this appeal assessee has challenged the two addi .....

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18 (Del) (S8), stating that even if there is no exempt income, disallowance u/s 14A has to be made. We are of the considered view that the above said judgment has since been overruled by Hon'ble Jurisdiction High Court in the case of Cheminvest Ltd. Vs CIT [2015] 378 ITR 33 (Del), hence, the issue in dispute is squarely covered in favour of assessee, in view of the fact that there is no exempt income earned by the assessee during the year under consideration. Respectfully following the prece .....

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