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TMI Blog2019 (12) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... A No. 2123/Del/2015 is filed by the assessee raising the solitary ground of appeal against the order of the ld CIT(A) stating that sustaining the disallowance @10% of the dividend u/s 40A of the Act amounting to Rs. 674630/- is unwarranted. 3. The brief facts shows that the assessee filed its return of income on 30.09.2009 declaring total income of Rs. 70.48 crores assessed u/s 143(3) of the Act at Rs. 71.99 crores per order dated 29.12.2011 wherein disallowance u/s 14A of Rs. 674630/- was made amongst other disallowance. The issue was agitated before the ld CIT(A) who upheld the same. 4. The case of the appellant is that all the scripts of investments are held by it as stock in trade, therefore, no disallowance u/s 14A can be made. 5. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon‟ble Supreme Court in Maxoop Investment Ltd Vs. CIT 402 ITR 640 wherein, in para No. 40 the Hon‟ble Supreme Court has dealt with the same issue. It has been held that when the share are held as stock in trade, it becomes the business activity of the assessee. Whether the dividend earned or not is immaterial. It would be "quirk of fate‟ if the dividend is received. The Hon‟ble Supreme Court thus held that in such cases there cannot be any disallowance u/s 14A of the Act. Thus, the fact is not denied that assessee is holding exempt income generating investment as stock in trade, the disallowance made by the ld Assessing Officer and confirmed by the ld CIT(A) is not sustainable. Accordingly, we direct the ld Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on long term housing loan to the total income of the assessee. In the case of the assessee interest on long term housing loan is 55.89% compared to total receipt of the assessee. Thus, he held that 48.96 crores is profit from long term housing loan business. He granted deduction of 20% thereon. The assessee aggrieved preferred before the ld CIT(A) who allowed the claim of the assessee relying on the decision of the CIT(A) in earlier years he deleted the disallowance. Therefore, the revenue is in appeal. 15. The ld Departmental Representative vehemently supported the order of the ld Assessing Officer. 16. We have carefully considered the rival contentions. The appellant is a subsidiary of Punjab National Bank and is engaged in the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f deduction u/s 36(1)(viii) of the Act applying the ratio of 62.75%. In the result we do not find any merit in ground No. 1 of the appeal. Hence, it is dismissed. 17. Ground No. 2 of the appeal is with respect to deduction u/s 14A. The assessee has earned exempt income of Rs. 32671197/-. The assessee did not make any disallowance u/s 14A of the Act. Assessee did not file any explanation on expenses attributable to exempt income. AO applied Rule 8D and disallowed Rs. 308685370/- u/s 14A. The ld CIT(A) deleted the disallowance as per Rule 8D but retained 10% of such disallowance. He further held that the AO has not discussed the matter at all and no relationship has been shown between the exempt income and expenditure incurred. Thus, it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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