TMI Blog2018 (2) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... would prima facie indicate a double addition of the very amount i.e. acquisition cost as well as loss arising from sale of the relevant capital asset. We therefore deem it appropriate that ld. CIT(A) needs to adjudicate this entire three folded issue once again as per law after affording adequate opportunity of hearing to the assessee to place on record all details. These three substantive grounds are therefore treated as accepted for statistical purposes. Section 14A r.w. Rule 8D disallowance - Held that:- We notice that the assessee’s stand throughout has been that it had re-invested dividend receipt from already invested mutual funds for the purpose of deriving exempt income in question. It emerges that a co-ordinate bench of this tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. All these three grounds involve a common set of facts. This assessee claimed sale of the above software amounting to ₹ 11,14,000/- received from M/s. Vibgyor Scientific Research Pvt. Ltd. as a capital receipt thereby resulting into short term capital loss of ₹ 5,88,470/-. The assessee s case was that three parties M/s. Vascular, Medtronic R. R. Agency had sponsored the above software. Former two of them denied any such sponsorship. The third entity namely M/s. R. R. Agency filed its confirmation of sponsorship. The said confirmation forms part of case records before us. The Assessing Officer went into a detailed discussion to conclude that the assessee had failed to prove relevant sponsorship in case of all three entities w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adequate opportunity of hearing to the assessee to place on record all details. These three substantive grounds are therefore treated as accepted for statistical purposes. 4. This leaves us with assessee s latter grievance seeking to challenge Section 14A r.w. Rule 8D disallowance of ₹ 50,822/- made in both the lower proceedings. The Assessing Officer as well CIT(A) applied Rule 8D to disallow proportionate interest as well as administrative expenditure of ₹ 936/- ₹ 49,886/-; totaling to ₹ 50,822/- in assessee s hands as affirmed in lower appellate proceedings. 5. We have heard rival submissions. Relevant findings perused. We notice that the assessee s stand throughout has been that it had re-invested divide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management per se. The surplus fond of the company has been simply parked in the mutual funds. We take cognizance of the argument on behalf of the assessee that mutual funds investment bears different traits and is a different species of investment. The mutual funds are supervised by the experts in the field and management charges for such supervision is recovered from the clients. This being so, an investor in the mutual fund separately pays administrative and managerial expenses unlike a case where assessee chooses to make investment in shares directly. In the case of a mutual funds, administrative and managerial expenses are factored in the investments itself. In such a scenario, the explanation offered by the assessee of no expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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