9911796707
TMI Blog2015 (2) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) & (3) of the Act read with Rule 8D on the ground that these provisions are applicable retrospectively and on the principle of 'Contemporaneous Expositio'. Even otherwise no such disallowance is called for and the same be deleted. 2. The learned CIT(A) has erred in law and on facts in confirming the action of the A.O. of disallowing Rs. 36,32,762/- of interest expenditure, Rs. 6,91,195/- out of administrative and other expenses and ad hoc Rs. 1,00,000/- out of Miscellaneous Expenses. 3. The brief facts of the case are that the Assessing Officer observed that the assessee has shown exempt dividend income of Rs. 2,90,60,570/-. He also observed that in reply to the show-cause notice of the Assessing Officer as to why disallowance u/s 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower authorities and material available on record. The undisputed facts of the case are that the assessee during the year under appeal has shown exempt dividend income of Rs. 2,90,60,570/-. The assessee submitted before the Assessing Officer that the assessee was in the business of derivatives and therefore, had to purchase shares which is the business activity of the assessee and hence, the provisions of Section 14A read with Rule 8D were not applicable to it. However, the Assessing Officer, not being satisfied with the explanation of the assessee, made disallowance u/s 14A of 53,92,005/- which was restricted to Rs. 44,23,957/- on appeal by the CIT(A). 10. We find that similar issue had come up before this Bench of the Tribunal in assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dividend income, no notional expenditure could be deducted from the said income. It is not the case of the assessee retaining any shares so as to have the benefit of dividend. 63 per cent of the shares, which were purchased, are sold and the income derived therefrom is offered to tax as business income. The remaining 37 per cent of the shares are retained. It has remained unsold with the assessee. It is those unsold shares that have yielded dividend, for which, the assessee has not incurred any expenditure at all. Though the dividend income is exempted from payment of tax, if any expenditure is incurred in earning the said income, the said expenditure also cannot be deducted. But in this case, when the assessee has not retained shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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