|COURT:||Calcutta High Court|
|SECTION(S):||14A, Rule 8D|
|CATCH WORDS:||Disallowance u/s 14A & Rule 8D, exempt income|
|COUNSEL:||J. P. Khaitan|
|DATE:||February 10, 2017 (Date of pronouncement)|
|DATE:||February 15, 2017 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 14A Rule 8D: No disallowance with respect to exempt income can be made if the securities are held as stock-in-trade. CBDT Circular No. 5/2014 dated 11.02.2014 referred|
(i) The Tribunal found that the assessee does not have any investment and all the shares are held as stock in trade as is evident from the orders of the lower authorities. On those facts the Tribuanl held:- “Once, the assessee has kept the shares as stock in trade, the rule 8D of the Rules will not apply.”
(ii) In Dhanuka & Sons (supra) it was found there was no dispute that part of the income of the assessee from its business was from dividend whereas the assessee was unable to produce any material before the authority below showing the source from which such shares were acquired. That decision is distinguishable on facts as not applicable to this case. We also do not find the Revenue had urged that the expenditure being disallowed was in relation to exempt income not arising in the previous year for application of the said circular to be considered. The Assessing Officer had accepted the correctness of the disallowable expenditure offered by the assessee on its claim of Rs.25,68,04,353/- as long term capital gain. He did not allow the claim itself treating the said amount as business income to thereafter disallow the offered expenditure.
(iii) In view of the clear finding of fact regarding the exempt income claimed treated to be business income and the shares held by the assessee having been treated as stock in trade, we do not find the case involves a substantial question of law. The application and appeal are thus dismissed.