GAURAV VINOD NEVATIA,MUMBAI vs. ACIT 21(2), MUMBAI

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ITA 4955/MUM/2014Status: DisposedITAT Mumbai05 October 2016AY 2010-113 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that no disallowance under Section 14A is warranted in respect of shares held as stock in trade, following High Court decisions. The matter was restored to the AO for re-computation.

What were the facts?

The assessee's appeal concerned a disallowance of Rs. 22,20,420/- made by the AO under Section 14A. The disallowance was in respect of shares held as stock in trade.

What were the issues?

Whether disallowance under Section 14A is applicable to shares held as stock in trade.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G”, BENCH MUMBAI

For Appellant: Shri Bharat M Pathak
For Respondent: Shri Jeevanlal Lavedia
Hearing: 04/10/2016Pronounced: 05/10/2016

O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against order of CIT(A) for the assessment year 2010-2011 in the matter of order passed under Section 143(3) of the I.T.Act.

2.

The only grievance of assessee relate to disallowance of Rs.22,20,420/- under Section 14A. It was contended by learned AR that AO had made disallowance under Section 14A in respect of shares held as stock in trade. He relied on the decision of Bombay High Court in of 2013 dated 17/03/2015 in case of India Advantage Securities Ltd., and also Karnataka High Court in case of CCL Limited wherein it was held that no disallowance under Section 14A is warranted in respect of shares held as stock in trade.

1.

2 (A.Y.2010-11 (Shri Gaurav Vinod Nevatia) 3. We have considered rival contention and found that the disallowance has been made by AO under Section 14A in a routine manner. In view of the decision of the Bombay High Court and Karnataka High Court as referred above, no disallowance is required to be made in respect of shares held as stock in trade. Respectfully following the decision of the jurisdictional High Court, we restore the matter back to the file of the AO for excluding the shares held as stock in trade while computing disallowance under Section 14A. We direct accordingly.

4.

In the result, appeal of the assessee is allowed for statistical purposes.

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