14A vs share trading !

[CA.BHUPENDRASHAH]

how can it exceed tax free income?

[sivaiah G]

though different members have expressed dissent, I have been consistently arguing that though exemtped income is not received in the year, the related expenditure is not allowable. Now this issue has been set at rest by the special bench constituted for this purpose in Bombay, the decision of which is available on Taxindiaonline.com. I hope the discussion will stop here regarding this issue.

[sivaiah G]

I think I have wrongly quoted the decision in the above mentioned reply. The correct decision is
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH 'B' SPECIAL BENCH: NEW DELHI
Before Shri. R P Garg, VP, A D Jain and Rajpal Yadav, JM
ITA No. 87/Del/2008
Assessment Year: 2004-05
M/s Cheminvest Ltd
Max House, 1 Dr Jha Marg, New Delhi -
110003
PAN NO: AAACC0912A
ITO, Ward 3(3), New Delhi

which is available on this site also.

With  regards..................................,

[bhaveshformals]

I would disagree that the matter has been laid to rest by Cheminvest by the Delhi ITAT.

Further,with due respect, Cheminvest also has one more strange logic. It says that the Rule 8D is to be applied automatically in case of tax free income. One need not go into the nature of different expenses.
This is actually contradictory to the language used in section 14A (2).


 

[pawansingla]

KINDLY read CHEMINVEST LTD v/s ITO 124 TTJ 577(DELHI)(SB).

[bhaveshformals]

I have already read it.

With due respect, the logic does seem strange that you directly go for Rule 8D rather than first compel the AO to express dissatisfaction with the claims of the Assessee.