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TMI Blog2019 (11) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... ne. Therefore, even at the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stock-in-trade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes up in order to earn profits. The Tribunal has held in favour of the respondent assessee that it had earned the revenue on the shares held as stock in trade only by a quirk of fate. - ITA 904/2019 and ITA 906/2019 - - - Dated:- 16-10-2019 - MR. VIPIN SANGHI AND MR. SANJEEV NARULA JJ. Appellant Through: Mr. Deepak Anand, Jr. Standing counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s question C . This question was answered in paragraph 7, 8 and 9 which read as follows; 7. The third issue pertains to the correctness of the order of the ITAT in deleting the addition of ₹ 38,02,52,097/- made by the AO on account of the contribution made by the Assessee to the Punjab Sind Bank Employees Pensions Fund Trust. The ITAT, in deciding the issue in favour of the Assessee, relied upon the decision dated 6th March 2013 of the Bombay High Court in ITA No. 2232 of 2011 (The Commissioner of Income Tax 6, Mumbai v. M/s. Glaxo Smithkline Pharmaceuticals). It is seen that the Bombay High Court has in the above order in turn relied on two orders passed by it dated 1st March 2013 in ITA No. 568 of 2012 (CIT v. Sua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naturally be treated as income under the head profits and gains from business and profession . What happens is that, in the process, when the shares are held as stock-in-trade , certain dividend is also earned, though incidentally, which is also an income. However, by virtue of Section 10(34) of the Act, this dividend income is not to be included in the total income and is exempt from tax. This triggers the applicability of Section 14-A of the Act which is based on the theory of apportionment of expenditure between taxable and non-taxable income as held in Walfort Share and Stock Brokers (P) Ltd. case. Therefore, to that extent, depending upon the facts of each case, the expenditure incurred in acquiring those shares will have to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestee company that would necessarily be earned by the assessee and the assessee alone. Therefore, even at the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stock-intrade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes up in order to earn profits. In the result, the appeals filed by the Revenue challenging the judgment of the Punjab and Haryana High Court in State Bank of Patiala also fail, though law in this respect has been clarified hereinabove. 6. The Tribunal has held in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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