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TMI Blog2012 (12) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance of expenditure on the purported earning of dividend income under the provisions of Section 14A r.w.r. 8DD of the I.T.Rules - the expenditure incurred through the Portfolio Manager to acquire share, is a capital expenditure and attributable to cost of acquisition of share. In view of the matter, at no point of time can it be said that the assessee was to make an extra income of ₹ 3,31,787 which was a total imaginary figure brought to tax by the AO. When two imaginary figures could overlap for disallowance to taxation and it was only the case of the AO to disallow expenditure which has been legitimately claimed capitalised by the assessee which stands otherwise disclosed in the P & L account could not become a hypothetica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be perused. 3. The learned DR on a specific query raised whether the issue stands covered by the decision of the Tribunal agreed that the ground raised by the Revenue stands adjudicated by the Tribunal on assessee s appeal vide Tribunal order dt.31.3.2010 placed on record pertaining to the assessment order u/sd.143(3) on the direction of the learned CIT u/s.263. 4. In view of the above, after hearing the rival parties, since the issue raised by the Revenue stands decided by the Tribunal in assessee s own case by order dt.31.3.2010 (supra) against which no further controverting material has been brought on record by the Revenue as pointed out by the learned CIT u/s.263, we dismiss the appeal of the Revenue being ITA No.007/CTK/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and per share cost comes to ₹ 67. The assessee also mentioned that during the year, he had sold 60,000 shares of NTPC Ltd. with a profit of ₹ 8,40,047 and closing balance of ₹ 50,82,770 was reflected in the balance sheet for remaining 75,150 shares. Later on, information collected by the AO was supplied to the assessee and he was asked to clarify the same. In his reply to the same, the assessee accepted that it had given ₹ 2,00,00,000 to portfolio manager and produced the document that Kotak Mohindra Investment (portfolio manager of assessee) had also raised a loan account to the extent of ₹ 7,99,99,840 at 14% rate of interest without any intimation to assessee as it had also did not applied for the loan. Kot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rieved the assessee appealed before the first appellate authority who in a brief order has confirmed the same by holding a view that the nature of expenses are such that they are revenue in nature ought to have been allowed or claimed under the provisions of Section 57(iii) in view of the dividend income being taxed as income from other sources. It may be pertinent here to mention otherwise that an addition for disallowing expenditure under the provisions of Section 14A had already been considered by the Assessing Officer when the learned CIT(A) on assessee s appeal on this separate ground directed the Assessing Officer to delete the addition of ₹ 4,06,160 as not legally sustainable on the facts and circumstances of the case. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment Ltd. for purchase of NTPC share. Since the share of reputed Company like NTPC is always over-subscribed, the allotment is made on prorata basis. Kotak Mahendra Investment Ltd. was handling the investment in share on behalf of the company. It advised the appellant to apply for the eligible amount of share which is below ₹ 10.00 crores, in order to avail allotment of more number of shares on prorata basis. Since the Company did not have the required fund at that time, Kotak Mahendra Investment Ltd. financed ₹ 7,99,99,840, @14% of interest to apply share of value of ₹ 9,99,99,800, against which the appellant invested ₹ 2.00 crores with Kotak Mahendra Investment Ltd. and balance was paid by Kotak Mahendra Inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the disallowance of expenditure amounting to ₹ 4,06,160 brought to tax by the Assessing Officer in the manner for computation u/r.8DD of the I.T.Rules r.w.s. 14A of the I.T.Act. 9. In view of the above, we are of the considered view that it was a fit case when two imaginary figures whether could overlap for disallowance to taxation and whether it was only the case of the AO to disallow expenditure which has been legitimately claimed capitalised by the assessee which stands otherwise disclosed in the P L account could not become a hypothetical figure on assumption and presumption when computation of Capital Gains has to necessarily include cost of acquisition also. This makes the addition fit for deletion. We set aside the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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