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TMI Blog2014 (6) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... ring for the assessee and Shri S. Das Gupta, the learned Joint Commissioner of Income-tax appearing for the Revenue. 3. The income of the assessee for the impugned assessment year included among other things, dividend income and long term capital gains on sale of shares. Both these income are exempt from taxation. Dividend income was Rs. 14,76,123/- and long term capital gains was Rs. 33,50,975/-, totaling to Rs. 48,27,098/-. The Assessing Officer invoked sec.14A and disallowed 10% of the above receipts, as expenses pertaining to earning of exempted income. 4. The assessee is a share broker. But the assessee is also purchasing and selling shares in its own account. The assessee sold shares in the previous year relevant to the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y it. Long term capital gains were derived from the shares held by the assessee. All these activities are carried on by the assessee in a composite manner. It is not the case of the assessee that the management of the assessee company and other personnel are not looking after the investment portfolio. All the activities are going on side by side. Therefore, a reasonable portion of the expenditure incurred for the management and administration of the business of the assessee is necessarily attributable to earning of exempted income. Therefore, the lower authorities are justified in making disallowance from the exempted income towards expenditure attributable to earning of that exempted income. Regarding the quantum of disallowance, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the above scenario. The assessee has clearly stated that it is maintaining a separate portfolio for investment in shares and a separate portfolio for its regular business of share broking. Even though books of account are not maintained separately, independent details are discernible from the books of account maintained by the assessee on the dual activities of the assessee. The assessee has maintained necessary particulars regarding the share investments such as, date of acquisition, consideration paid, details of sale, consideration received, distinctive numbers of the shares, the details of the parties etc. The fact that the assessee has earned dividend income and long term capital gains on sale of shares, supports the argument of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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