9911796707
TMI Blog2012 (7) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... ong term investments of the assessee constitute a significant portion of total investments, the income from which is exempt either as dividend or long term capital gain. As the portfolio of assessee consists mere of long term, investments than short term investments and therefore 5% disallowance of expenditure upheld by Ld CIT(A) does not seem to be justified - remit the case to the file of the AO to consider to the expenses which could be related to earning of exempt income i.e. long term capital gain and dividend income and recompute the disallowance - partly in favour of revenue. - I.T.A. No.2888 /Del/2011 - - - Dated:- 15-6-2012 - SHRI R.P. TOLANI, AND SHRI T.S. KAPOOR, JJ. Appellant by : Smt. Anusha Khurana, Sr. DR. Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The Assessing Officer further noted that assessee was also earning significant amount from dividend income therefore he held that interest and other expenses charged and claimed by the assessee against the income earned by it are not allowable to it either against the dividend income in view of specific provisions of section 14A or against income under the head capital gains. 3. The Assessing Officer further noted that assessee had made interest free loans to various persons whereas it had paid interest on borrowed funds. The Assessing Officer observed that these advances are not made to earn any income and therefore cannot be said to be made for business purposes and therefore he held that interest paid on borrowed money used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is position has been continuing for the last 10 years and has been continuously accepted by the Department. 4) That during assessment year 2005-06 2006-07 the appellant had profit on sale of shares both under the head business as well as capital gains and so in those years the Department had duly accepted the business income of the appellant. 5. That the loans granted by the appellant are very old and in fact has reduced during the year and moreover the disallowance of interest made in relation to these advances was deleted by ITAT as well as by Hon'ble Delhi High Court in the assessment year 1997-98. 5. The Ld CIT(A) after considering the submissions made by the assessee deleted the addition made by the Assessing Officer. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) by order dated 25.5.2009 for assessment year 2005-06 and order dated 15.2.2010 for assessment year 2006-07 after detailed discussion and after considering past history of the case upheld the claim of appellant for maintaining dual portfolio and having income both under the head capital gain as well as business income. During the year under consideration no change in the facts and circumstances has been brought on record by the Assessing Officer as compared to earlier years. In view of the above, therefore, the issue stands covered in favour of the appellant ----------in view of the findings above, that the appellant is also having business income and interest income apart from capital gains and exempt income, the disallowance made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Tribunal. 7. Ld DR argued that Ld CIT(A) had deleted the addition of expenses without considering the fact that assessee was having income from capital gains both short term and long term and investments both long term and short term constituted a major portion of assets of the company. The whole of the expenses incurred by the assessee cannot be said to be for earning short term capital gain or business income. she further argued that some portion of administrative and other expenses must be attributed to earning of income from long term investment and keeping in view the value of long term investment held by the assessee as compared to total investment, 5% disallowance made by the Ld CIT(A) is not justified. On the point of deleti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing from the previous year which fact is also verifiable from page 20 of the paper book. The facts of the present case are same as those decided by Hon'ble Delhi High Court. Respectfully following the judgment of Hon'ble Delhi High Court, we also hold the view that interest was allowable business expenditure and therefore we do not find any reason to interfere in the order of Ld CIT(A) to that extent. 10. As regards the deletion of administrative other expenses, disallowed by the Assessing Officer, we have observed that assessee is earning income from business, from short term capital gain, long term capital gain and from interest income. From the analysis of investment figures of assessee filed at pages 26-30 of paper book it becomes ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
