TMI Blog2019 (2) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... lves in agreement with the view taken by first appellate authority and we see no reason to interfere with the same. All the grounds as well as the appeal stand dismissed. Addition u/s 14A r.w.r 8D - Held that:- It is undisputed position that the Tribunal in assessee’s own case for AY 2009-10 as well as first appellate authority in AY 2011-12 has restricted the same to 5% of exempt income, which has been accepted by the assessee. Relying upon the same, first appellate authority has restricted the expense disallowance to 5% of exempt income, which is fair under the circumstances and no further relief could be granted to the assessee on this account. The same is in line with estimation made in earlier years and therefore, the grounds of appeal, to that extent, stands dismissed. So far as interest disallowance u/r 8D(2)(ii) is concerned, we find that the assessee has not offered any disallowance against the same and therefore, to contend that the Ld. AO failed to reject the workings made by assessee and record a proper satisfaction in that respect could not help the assessee in any manner. The same is devoid of any merits. We find substantial force in the argument of AR that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant plead before Honorable ITAT to add, alter or amend any or all grounds of appeal before or at the time of hearing. The assessment for impugned AY was framed by Ld. Assistant Commissioner of Income Tax, Circle-4(2), Mumbai [AO] u/s 143(3) of the Income Tax Act, 1961 on 10/02/2014 wherein the income of the assessee has been assessed at ₹ 604.52 Lacs after certain disallowances adjustments as against returned income of ₹ 594.49 Lacs e-filed by the assessee on 16/09/2011. 2.1 During impugned AY, the assessee being resident corporate entity was engaged in the business of financial service sector and as Share Brokers, sub brokers. As evident from the grounds of appeal, the sole subject matter of the appeal is determination of head under which gains earned by the assessee on sale of certain shares / securities would be assessable to tax. 2.2 During assessment proceedings, it was noted that the assessee earned Short Term Capital Gains of ₹ 116.16 Lacs against sale of certain shares, the details of which has been extracted at para-6.2 of the quantum assessment order. The assessee defended the same vide its letter dated 05/02/2014 wherein it inter-alia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to earn the gains in a business-like manner rather than to earn accretion to the same by way of dividend. The intention of the assessee gets manifested from the fact that the scrips have been sold within a very short span of time so as to reap the benefits of listing gains only. This is further fortified by the fact that the assessee was engaged as share broker and as evident from memorandum of association as placed on record, dealing in shares was one of the main objectives of the assessee company. Hence, after due consideration, we find ourselves in agreement with the view taken by first appellate authority and we see no reason to interfere with the same. All the grounds as well as the appeal stand dismissed. Assessee s Appeal ITA No. 2584/Mum/2016, AY 2012-13 6. The assessee has raised the following grounds of appeal:- 1. Commissioner of Income Tax (Appeals) erred in law and fact in confirming addition of ₹ 26,90,759/- made in accordance with Rule 8D (2)(ii) though facts of interest cost was explained to assessing officer same was on record. 2. Without prejudice to Ground No.1 Commissioner of Income Tax (Appeals) erred in law and fact in calculating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the suo-moto disallowance of ₹ 1.43 Lacs as offered by the assessee, the net disallowance worked out to ₹ 74.01 Lacs which was added to the income of the assessee. 7.3 The second addition pertains to sundry balances written-off for ₹ 11,40,522/- on account of refund receivable from Securities Exchange Board of India [SEBI]. Explaining the same, the assessee submitted that an amount of ₹ 17.61 Lacs was offered as income by the assessee as refund due from SEBI in AY 2005-06. However, only an amount of ₹ 6.21 Lacs could be received by the assessee and therefore, the balance amount of ₹ 11.40 Lacs, being non-recoverable, was written-off and claimed as deduction. However, in the absence of any evidence suggesting that SEBI has refused to recognize the assessee s claim, Ld. AO disallowed the same. 8. Aggrieved, the assessee agitated the same with partial success before first appellate authority vide impugned order dated 28/01/2016 wherein Ld. CIT(A), following its own decision in AY 2011-12, restricted the expense disallowance u/r 8D(2)(iii) to 5% of the exempt income but confirmed the interest disallowance u/r 8D(2)(ii). The addition of am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds in the shape of Share Capital Free Reserves to make new investments including stock in trade. The perusal of financial statements as placed on record reveals that there is no change in non-current investments made by the assessee during impugned AY whereas current investments and inventories have been funded by way of reduction in overall current assets. Therefore, a presumption was to be drawn in assessee s favor that own funds were used to make the investments. Therefore, upon due consideration, we are inclined to delete the impugned interest disallowance u/r 8D(2)(ii). This ground of assessee s appeal stands allowed. 10.3 So far as the amounts written-off against refund receivable from SEBI is concerned, the assessee has placed on record the relevant documents for AY 2005-06 to support the submissions that the refund amount was offered to tax in that year. The working of the refund other correspondences etc. made by the assessee with SEBI has also been placed on record. On factual matrix, we deem it fit to restore the matter back to the file of Ld. AO for re-adjudication of assessee s claim as per law after appreciating all these documentary evidences with a direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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