TMI Blog2014 (8) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... terest on borrowals as cost of shares, when the said shares are sold. Since assessee is not in the business of purchase and sale of shares, investment in shares and subsequent sale thereof, was shown under the head “Capital Gains” and since there was short term capital gains, the same was disclosed as such, after claiming interest paid as cost of shares. We do not find any reason to differ from the findings of the Ld. CIT(A). - Decided against revenue. - ITA.No.1787/Hyd/2013 - - - Dated:- 13-8-2014 - Shri B. Ramakotaiah, Accountant Member And Smt. Asha Vijayaraghavan, Judicial Member For the Revenue : Mr. Katta Kiran For the Assessee : Mr. Laxmi Nivas Sharma ORDER PER B. RAMAKOTAIAH, A.M. This Revenue appeal is ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant that in order to disallow the expenditure u/s. 14A, there must be a live nexus between the expenditure incurred and the income not forming part of total income and if the expenditure was incurred with an aim to earn taxable income, then no disallowance could be made u/s. 14A merely because some tax exempt income was received by assessee. In this case, no exempt income was received by the appellant from the shares as the investment in the shares and the period of sale of shares was for a shorter period. The appellant relied on the following case laws in support of his contention that no disallowance u/s. 14A was warranted when the appellant has not incurred and claimed any expenditure for earning the exempt income and the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort-term capital gain: ( i) CIT Vs Mithlesh Kumari (92 ITR 9) (Del) ( ii) CIT vs. Trishul Investments Ltd (305 ITR 434) ( iii) Rajrani Sohanlal Gupta Vs Assessee ITA.No. 1890 /M/2012 (ITAT, Mumbai). ( iv) Sonal Dhiren Vora, Ahemdabad Vs. Income Tax, vide ITA.No.24/Ahd/2012 (ITAT Ahmedabad). ( v) Sunita ADamani, Mumbai vs. Assessee, ITA.No. 570 /Mum/2010 (ITAT, Mumbai). ( vi) Rajendra Subhkaran Khemka vs. Income Tax, ITA.No.6641/Mum/2010 (ITAT, Mumbai). ( vii) Uday Hasmukhlal Vora, Ahmedabad vs. Income Tax, ITA.No.23/Ahd/2012 (ITAT Ahmedabad). In the case of CIT Vs Rajendra Prasad Moody (115 ITR 522), the Supreme Court held that interest on monies borrowed for purchase of shares was allowable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and since there was short term capital gains, the same was disclosed as such, after claiming interest paid as cost of shares. We do not find any reason to differ from the findings of the Ld. CIT(A). In fact, the A.O. has wrongly applied the principles laid down by the Coordinate Bench in the case of Harish Krishna Kantha Bhatt vs. ITO (2004) 91 ITD 311 (Ahd.). In that case, the issue was not of treating the interest paid as cost of share but revenue expenditure claimed against the dividend income which was not taxable in that relevant assessment year. It was held that since the dividend was not taxable, the interest claimed as revenue expenditure cannot be allowed. We are unable to understand how this judgment would help the A.O. in comin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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