Case Law Details
Vertex Securities Ltd Vs ITO (ITAT Cochin)
The assessee has made an investment in equity shares of Rs.5,84,10,100/-. The dividend from such investment is exempted from the tax. Accordingly, AO computed the disallowance u/s 14A of the Act at Rs.11,84,111/-. The same was confirmed by the Ld. CIT(A). Before us, Ld. A.R. submitted that assessee being not exempted income as such section 14A r.w. Rule 8D of the Income Tax Rules cannot be applied to the assessee’s case. In our opinion, whether the assessee has earned exempt income or not to be seen from its financials. Hence, the issue remitted to the AO to examine whether assessee earned any exempted income in the assessment year under consideration. If the assessee has not earned any exempted income, there cannot be any disallowance u/s 14A r.w. Rule 8D of the Income Tax Rules. Further, if the assessee has earned exempted income, assessee has to demonstrate that the investment has been made out of the own funds and not from the interest-bearing borrowed funds. Accordingly, the A.O. is directed to reconsider this issue and decide it afresh. This issue remitted to AO for fresh consideration in accordance with law.
FULL TEXT OF THE ORDER OF ITAT COCHIN
This appeal by assessee is directed against order of CIT(A) dated 3.8.2020 for the assessment year 2013-14. The first ground in this appeal is with regard to the addition on account of stamp duty payable to the Government.
2. The grievance of the assessee is with regard to addition of Rs.4,72,412/- on account of stamp duty payable to Government, which has not been paid. The assessee has collected a stamp duty, which form part of bill raised to the customer and it was not paid to the Government and claimed as an expenditure. Since the assessee collected and not paid to the Government, same has been treated as income of the assessee. Against this assessee is in appeal before us.
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