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TMI Blog2019 (8) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... "1. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of the AO of invoking the provisions of Rule 8D without recording any dissatisfaction to the claim of appellant. 2. The learned CIT(A) has erred both in law and on the facts of the case in confirming disallowance made by the AO u/s. 14A of the Act rw.r. 8D of the Income Tax Rules, 1962 to the extent of Rs. 10,28,141/-. 3. The learned CIT(A) has erred both in law and on the facts of the case in confirming that disallowance u/s. 14A is to be made while calculating book profit u/s. 115JB. 4. The learned CIT(A) has erred both in law and on facts of the case in confirming disallowance of expenses to the extent of Rs. 2,79,788/- in the computation of short term capital gain u/s. 48 of the Act. 5. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gain or long term capital gain depending upon the period of holding and no income is shown from mutual fund from year to year basis. Therefore, the Ld. CIT(A) has computed the disallowance to the amount of Rs. 11,01,175/- after reducing the disallowance of Rs. 73,074/- already made by the assessee, the net disallowance of Rs. 10,28,141/- was confirmed. We have heard the rival contention and perused the material on record. The AO has computed the disallowance under Sec. 14A to the amount of Rs. 12,62,770/-. However, the Ld. CIT(A) has confirmed the disallowance to the extent of Rs. 10,28,141/- after excluding investment in the nature of mutual fund etc. With regard to the issue in appeal that AO has not recorded any satisfaction for making disallowance under Sec. 14A of the Act, we noticed that AO at Page 5 of the assessment order has clearly stated that assessee has not maintained any record to demonstrate that no administrative expenditure has been incurred for the purpose of earning exempt income. The AO has also cited instances ofadministrative expenditure such as the review of investment,monitoring of the activities of the company in which the assessee company has made s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and restricted the disallowance to the extent of Rs. 2,79,788/-(consisting of Rs. 96,172/- toward management fees and Rs. 1,83,616/- toward portfolio management fees). During the course of appellate proceeding before us the Ld. Counsel has contended that Ld. CIT(A) has failed to appreciate that portfolio management fees are allowable as deduction under Sec. 48 of the Act and reliance was placed on the decision of Joy Beauty Care Pvt. Ltd. vs. DCIT ITA 856/Kol/2017. We have perused the above cited decision of the Co-ordinate Bench. The relevant part of the above cited decision is reproduced as under:- "12. We have heard rival submissions. At the outset, we find that the Ld. CIT(A) had accepted that the gains on sale of shares through PMS providers to be taxed under the head capital gains. Against these findings of the Ld. CIT(A), the revenue has not preferred the appeal before us as per the material available on record. The assessee placed reliance on the decision of Co-ordinate Bench of Pune Tribunal in the case of KRA Holding & Trading Pvt. Ltd. vs. DCIT in ITA Nos. 499, 500, 1320 to 1322 of 2008 and 434 of 2009 and 806 of 2009 dated 31.05.2011 reported in 2011 (5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound No. 1:- Disallowance of Rs. 14,076 under Sec. 36(1)(va):- 10. During the assessment the AO noticed that assessee has made late payment of employees' contribution towards Provident Fund and ESI on the various date as reported at Page 2 & 3 of the assessment order. Therefore, an aggregating amount of Rs. 14,076/- was disallowed after considering the decision of Hon'ble Gujarat High Court in the case of CIT vs. GSRTC (Tax Appeal No. 637 of 2013) as per provision of Sec. 3691)(va) r.w.s. 2(24)(x) of the Act. 11. Aggrieved assessee has filed appeal before Ld. CIT(A). Ld. CIT(A) has dismissed the appeal. We have heard the rival contention and consider that Hon'ble Gujarat High Court in the above cited decision has held that the deduction towards employees' contribution to Provident Fund and ESI is available if such sum is credited by the assessee to the employees account in the relevant fund on or before the due date as per respective Acts. Therefore, considering the decision of Hon'ble Gujarat High Court we do not find any error in the decision of the Ld. CIT(A). Accordingly, this ground of appeal of the assessee is dismissed. Ground No. 2:- Confirming disallowance of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. The AO has computed the disallowance under Sec. 14A to the amount of Rs. 12,62,770/-. However, the Ld. CIT(A) has confirmed the disallowance to the extent of Rs. 10,28,141/- after excluding investment in the nature of mutual fund etc. With regard to the issue in appeal that AO has not recorded any satisfaction for making disallowance under Sec. 14A of the Act, in this regard, we have noticed that AO at Page 5 of the assessment order has clearly stated that assessee has not maintained any record to demonstrate that no administrative expenditure has been incurred for the purpose of earning exempt income. It is also stated that some administrative expenditure such as the review of investment or monitoring of the activities of the company in which the assessee company has made substantial investment might have been done by the director of the assessee company and the employees of the assessee company. The AO has also stated that, therefore, the salary paid by the assessee company to those employee and the director who have devoted their time towards investment activities have not been utilised exclusively for the purpose of the business of the company. In the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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