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TMI Blog2022 (4) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT Vs. Essar Tech. Ltd. [ 2018 (2) TMI 115 - SUPREME COURT ] held that rule 8D is prospective in operation and cannot be applied to any assessment year prior to assessment year 2008-09. Therefore, we don t find any error in the finding of ld. CIT(A). Accordingly, this ground of appeal of the revenue stand dismissed. Correct head of income - Investment in IPO - STCG or business income - HELD THAT:- Assessee is in the business of banking and as per the investment policy it has made an elaborate investment in various instrument such as investment in government securities, treasury bills, CD s, CP s, Tier-III Bonds, Debentures IPO s, Equity Shares etc, - CBDT Circular No. 4 of 2007 dated 15.06.2007 provide that assessee can have two portfolio i.e Investment port folio comprising of securities which were to be treated as capital asset and trading port folio comprising of stock in trade which were to be treated as trading assets.The ld. CIT(A) has also discussed that some of the shares subscribed by the assessee in the IPO s were held for duration up to 340 days, therefore, observation of the assessing officer that all the shares were sold immediately after allotment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind any infirmity in the decision of the order of the ld. CIT(A), therefore, this ground of appeal of the revenue stand dismissed. Depreciation on lease asset - recharacterisation of various lease transactions in earlier years as Hire Purchase / Financing transactions - HELD THAT:- It is noticed that similar issue on identical facts have been adjudicated by the ITAT in the appeal of the assessee pertaining to assessment year 1995-96 to 2003-04 as per copies of order placed in the asesssee s paper book wherein the issue was set aside to the A.O for adjudicating the same in accordance with law and in the light of the order passed in the earlier years. Accordingly, we restore this matter to the file of the A.O to examine the claim of the assessee in accordance with law as per the direction of the ITAT given in the earlier years. Therefore, this ground of appeal of the assessee is allowed for statistical purposes. - ITA No.4857/Mum/2009 And ITA No.4971/Mum/2009 - - - Dated:- 29-3-2022 - Shri Amarjit Singh, Accountant Member And Ms. Kavitha Rajagopal, Judicial Member For the Appellant : Shri F.V. Irani For the Respondent : Shri Jasbir Chouhan ORDER PER AMAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,06,056/- and such disallowance has been consistently upheld by the ld. CIT(A) for last several years. It was also explained that no specific amount including any administrative expenses were incurred for earning the aforesaid dividend income. The A.O did not agree with the submission of the assessee and he was of the view that making investment was a most scientific and research oriented activity for which most experienced staff and highly technological infrastructure was required to carry out investment activity. The A.O stated that the disallowance of expenditure incurred towards earning exempt income was required to be determined in accordance with rule 8D and stated that amendment to Sec. 14A was retrospective. Accordingly, the assessing officer had worked out disallowance u/s 14A r.w.Rule 8D to the amount of ₹ 11,49,35,029/- and added to the total income of the assessee. 4. The assessee had filed appeal before the ld. CIT(A). The ld.CIT(A) had deleted the addition. 5. Heard both the side and perused the material on record. The ld. CIT(A) held that sub-section 2 and sub-section 3 of the Section 14A made applicable w.e.f 1st April introduced by Finance Act, 2006 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness asset and not capital asset, therefore, profit of ₹ 7,14,67,252/- was taxed as business income and benefit of Sec. 111A was not allowed to the assessee. 7. The assessee filed the appeal before the ld. CIT(A) the ld. CIT(A) has allowed the appeal of the assessee. 8. Heard both the sides and after perusal of the material on record it is observed that assessee is in the business of banking and as per the investment policy it has made an elaborate investment in various instrument such as investment in government securities, treasury bills, CD s, CP s, Tier-III Bonds, Debentures IPO s, Equity Shares etc,. The CBDT Circular No. 4 of 2007 dated 15.06.2007 provide that assessee can have two portfolio i.e Investment port folio comprising of securities which were to be treated as capital asset and trading port folio comprising of stock in trade which were to be treated as trading assets. The ld. CIT(A) has also discussed that some of the shares subscribed by the assessee in the IPO s were held for duration up to 340 days, therefore, observation of the assessing officer that all the shares were sold immediately after allotment of shares was factually incorrect. Considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 24,14,97,278/- against opening balance in the provision of amount at ₹ 14,35,29,262/-, therefore, the difference of ₹ 9,79,68,016/- is allowable as deduction. Therefore, we don t find any error in the decision of ld. CIT(A), accordingly, this ground of appeal stand dismissed. 4th Ground: Deleting the addition of ₹ 12,52,771/- being entrance fee paid to club: 11. During the course of assessment the A.O noticed that assessee has claimed entrance fees paid to various clubs of ₹ 12,52,771/- the A.O was of the view that such fees paid to clubs for using club facility provide advantage to the assessee of an enduring nature which was capital in nature, therefore, same was added to the total income of the assessee. 12. In the appeal ld. CIT(A) has deleted the disallowance made by the A.O. 13. Heard both the side and perused the material on record. The ld. CIT(A) has placed reliance on the decision of ITAT, Mumbai, in the case of Bombay Burmah Trading Corporation Ltd. reported at 82 ITD 531 and Hon ble jurisdictional High Court in the case of Otis Elevator reported in 195 ITR 682 wherein it has been held that even entrance fees paid to club is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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