TMI Blog2019 (1) TMI 1902X X X X Extracts X X X X X X X X Extracts X X X X ..... We observe that the assessee has filed a computation with net disallowance u/s 14A, having considered the total value of non-taxable investments as on 31.03.2011 and 01.04.2010. It is supported by the closing stock as on 31.03.2011 on which dividend was earned in FY 2010-11 and opening stock as on 01.04.2010 on which dividend was earned in FY 2010-11. In the case of ACIT v. Vireet Investment (P) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] it has been held by the Special Bench that only those investments are to be considered for computing average value of investment which yielded exempt income during the year. The latest computation sheet filed by the counsel, wherein net addition also has been arrived at by the assessee, was not submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , long term capital gains and income from other sources. During the year under consideration, the assessee has earned a dividend income of ₹ 3,54,15,176/- on shares and claimed it as exempt u/s 10(34) of the Act. In response to a query raised by the Assessing Officer (AO) to explain as to why disallowance u/s 14A r.w. Rule 8D should not be made on corresponding expenses, the assessee submitted vide letter dated 07.03.2014 that as against the exempt income claimed, he has added back in his computation of income, a sum of ₹ 13,22,294/- u/s 14A of the Act. Also the assessee stated in his submission before the AO that : the Ld. CIT(A) and the Hon ble ITAT have both decided the issue in favour of the assessee for AY 2008-09 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), held that section 14A of the Act is not applicable in respect of dividend income received from shares held as stock-in-trade. The Ld. CIT(A) found that the issue of disallowance u/s 14A and the applicability of Rule 8D have already been deliberated upon before the appellate authorities in appellant s own case and orders have been passed by the ITAT, Mumbai for the AYs 2008-09, 2009-10 and 2010-11, under similar circumstances, allowing the appeal of the appellant. Also relying on the decision in HDFC Bank Ltd. v. DCIT [2016] 67 taxmann.com 42 (Bom), the Ld. CIT(A) held that no disallowance of expenditure can be made u/s 14A of the Act with respect to the shares held by the taxpayers as stock-in-trade. Thus the Ld. CIT(A) restricte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the Ld. counsel has mentioned the total value of non-taxable investment as on 31.03.2011 and 01.04.2010. Also as per Exhibit-A , closing stock as on 31.03.2011 on which dividend earned in FY 2010-11 has been mentioned. In Exhibit-B , opening stock as on 01.04.2010 on which dividend earned in FY 2010-11 has been stated. 7. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In the case of Maxopp Investment Ltd. (supra), it has been held that in those cases, where shares are held as stock-in-trade, main purpose is to trade in those shares and earn profits there from, in the process, certain dividend is also earned, though incidentally, which is also an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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