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TMI Blog2016 (12) TMI 1748X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the same order passed by the learned CIT(A). 2. Grievances raised in the appeal by the Assessing Officer are as follows :- "1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,19,20,337/- made by the Assessing Officer on account of disallowance u/s 14A of the Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent." 3. Grievances raised by the assessee in it's Cross Objection are as follows :- "1. The CIT (Appeals) erred in upholding the disallowance of Rs. 20,37,982/- under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 8D(2)(iii) r.w.s. 14A of the Act requires, the same is already computed by AO in order u/s 154 dated 13.02.2012 at Rs. 20,37,982/-, this disallowance is confirmed. In view of the above, the addition made by AO on the ground of disallowance u/s. 14A r.w.r. 8D of Rs. 5,52,13,963/- (as per order u/s. 154 dated 13.02.2012, the amount of disallowance is reduced to Rs. 2,19,20,337/- does not sustain, hence, the same is deleted and disallowance for administrative expenses as per Rule 8D(2)(iii) of Rs. 20,37,982/- is confirmed. Accordingly, I direct the Assessing Officer to give relief to the appellant-company. Ground of the appellant is partly allowed." 5. None of the parties is satisfied, and, thus, both the parties are in appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. While deciding so co-ordinate bench has observed as under :- 6. We have heard rival contentions and gone through the facts and circumstances of the case as well as available records including Paper Book and case laws relied by the ld. AR. Addition of Rs. 4,04,204/- has been made by the AO against dividend income of Rs. 58,963/-. Nothing contrary has been brought to the fact that assessee is a dealer in shares and profit in share business has been shown by the assessee under the head "income from business". A.O. has not made any specific finding to support the disallowance made by him. Further in case of Zaveri Virjibhai Mandalia vs. ACIT in ITA No.469/Ahd/2007 for AY 2004-05, the coordinate Bench held where the assessee is a deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble High Court, we are of the view that in the present facts of the case, the interest expenses incurred by the assessee have to be treated as business expenses and no disallowance can be made under sec.14A. We accordingly direct the deletion of the disallowance made by AO. Thus this ground of assessee is allowed. 13. In the result, appeal of the assessee is allowed." 7. Further in the case of Jivraj Tea Ltd. vs. DCIT, Circle-1, Surat in ITA No.866/Ahd/2012 and others, the co-ordinate Bench held that disallowance under section 14A cannot be more than the exempt income. The relevant portion of the decision is reproduced below- "20. We have heard the rival submissions and perused the orders of the lower authorities and materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the exempt dividend income. Therefore, we restrict the disallowance of administrative expenses to Rs. 900/- only, being the exempt dividend income earned by the assessee. Thus, this ground of appeal of the assessee is partly allowed." 8. The facts of the case of assessee are well covered by the above referred judicial pronouncements of the Co-ordinate Benches. So much so that it is undoubted that assessee is a dealer in shares, trading of shares has been shown as income from business, stock in trade in shares is at Rs. 41,16,992 investment in shares not held for business are only Rs. 51,000, and dividend income earned during the year is Rs. 58,963. However, assessee has maintained same books of accounts for his business of trading in c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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