BACHUBHAI DHARAMSHI ARETHIYA,NAVI MUMBAI vs. ASST CIT CC 3, THANE

ITA 890/MUM/2020Status: DisposedITAT Mumbai14 October 2022AY 2013-1410 pages
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What did the Tribunal hold?

The Tribunal allowed the grounds related to Section 14A, holding that the capital contributed to the partnership firm was for business purposes and the exempt income was consequential. However, it dismissed the grounds related to the computation of long-term capital loss, upholding the AO's method of indexation based on payment dates.

What were the facts?

The assessee's appeal concerned disallowance under Section 14A and the computation of long-term capital loss. The Assessing Officer (AO) made additions for interest on capital, disallowances under Section 14A, and reduced the claimed long-term capital loss. The Commissioner (Appeals) partly allowed the appeal, deleting the addition for interest on partners' capital but upholding the disallowances under Section 14A and the reduction in long-term capital loss.

What were the issues?

The key issues were the applicability of Section 14A disallowance on exempt income from partnership and the correct method for computing indexation for long-term capital gains on sale of properties.

Which sections of the Income-tax Act were involved?

Section 14A,Section 10(2A),Section 10(38),Section 48,Section 2(42)(a)

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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

For Appellant: Ms. Ritika Agarwal, Adv
Hearing: 18/07/2022Pronounced: 14/10/2022

PER GAGAN GOYAL, A.M: This appeal by the assessee is directed against the order of Ld. Commissioner of Income Tax (Appeal), Pune-11 [hereinafter referred to as [‘CIT(A)’] dated 17.01.2020 passed under Section 250 of the Income Tax Act, 1961

2 ITA No. 890/Mum/2020-Bachubhai Dharamshi Arethiya

(hereinafter referred to as [‘the Act’] for the Assessment Year (AY) 2013-14. The assessee has raised the following grounds of appeal: Grounds of appeal Tax effect relating to each Ground of appeal (see note below)

1.

BECAUSE, the CIT (A) has erred in law and on facts Rs. 258,298/- in confirming disallowance us. 14A

The order continues below.

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