{"id":5805,"date":"2012-10-12T06:56:56","date_gmt":"2012-10-12T06:56:56","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=5805"},"modified":"2012-10-12T07:02:08","modified_gmt":"2012-10-12T07:02:08","slug":"dcit-vs-india-advantage-securities-ltd-itat-mumbai-itat-view-that-s-14a-applies-to-shares-held-as-stock-in-trade-cannot-be-followed","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/dcit-vs-india-advantage-securities-ltd-itat-mumbai-itat-view-that-s-14a-applies-to-shares-held-as-stock-in-trade-cannot-be-followed\/","title":{"rendered":"DCIT vs. India Advantage Securities Ltd (ITAT Mumbai)"},"content":{"rendered":"\n\n
Click here to download the judgement (India_Advantage_Securities_14A_Stock_in_trade.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nITAT view that s. 14A applies to shares held as stock-in-trade cannot be followed
\n<\/strong><\/p>\n

The assessee claimed, relying on Leena Ramachandran<\/a><\/strong> 339 ITR 296 (Ker) & CCL Ltd<\/a><\/strong> 250 CTR 291 (Kar), that as the shares were held as stock-in-trade, s. 14A did not apply. The department opposed this plea by relying on American Express Bank<\/a><\/strong> where the view was taken, after considering Leela Ramchandran<\/strong> & Daga Capital Management<\/a><\/strong> 117 ITD 169 (Mum) (SB), that s. 14A applied even to a trader in shares. HELD by the Tribunal:<\/p>\n

Though in American Express Bank<\/a><\/strong>, the Tribunal followed Daga Capital Management<\/a><\/strong> 117 ITD 169 & distinguished Leena Ramachandran<\/a><\/strong> 339 ITR 296 (Ker) & held that s. 14A applies also to a trader in shares, the Karnataka High Court has held in CCL Ltd<\/a><\/strong> 250 CTR 291 that disallowance of expenses incurred on borrowings made for purchase of trading shares cannot be made u\/s.14A. As this is a direct judgment<\/strong> of a High Court on the issue, the same has to be followed<\/strong> in preference<\/strong> to the decision of the Special Bench of the Tribunal in Daga Capital Management<\/strong> (or that in American Express Bank<\/strong>) & it has to be held that disallowance of interest in relation to the dividend received from trading shares cannot be made (Ganjam Trading Co<\/strong> (included in file) & Yatish Trading Co<\/a><\/strong> 129 ITD 237 followed).<\/p><\/blockquote>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Though in American Express Bank<\/a><\/strong>, the Tribunal followed Daga Capital Management<\/a><\/strong> 117 ITD 169 & distinguished Leena Ramachandran<\/a><\/strong> 339 ITR 296 (Ker) & held that s. 14A applies also to a trader in shares, the Karnataka High Court has held in CCL Ltd<\/a><\/strong> 250 CTR 291 that disallowance of expenses incurred on borrowings made for purchase of trading shares cannot be made u\/s.14A. As this is a direct judgment<\/strong> of a High Court on the issue, the same has to be followed<\/strong> in preference<\/strong> to the decision of the Special Bench of the Tribunal in Daga Capital Management<\/strong> (or that in American Express Bank<\/strong>) & it has to be held that disallowance of interest in relation to the dividend received from trading shares cannot be made (Ganjam Trading Co<\/strong> (included in file) & Yatish Trading Co<\/a><\/strong> 129 ITD 237 followed)<\/p>\n

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