FICHEM,AHMEDABAD vs. THE DY.CIT, CIRCLE-2(1)(1) (PREVIUOSLY CIRCLE-6(1)), AHMEDABAD

Heard the arguments of both the parties and perused material on record. M/s. Fichem vs. DCIT Asst.Year –2017-18 - 2–

The Assessing Officer disallowed Rs. 11,72,273/- under Section 14A r.w.r. 8D of the Act. It is an undisputed fact that the assessee has received dividend income of Rs. 8,266/- and Long Term Capital Gain (in short “LTCG”) of Rs. 23,45,857/-. The LTCG includes capital gain of Rs. 11,82,580/- from private equity fund which is liable to tax as per the provisions of Section 115U of the Act.

We find that the Assessing Officer disallowed the entire expenditure debited and claimed in Profit & Loss Account of Rs. 11,72,273/- in addition to the amount disallowed by the assessee to the tune of Rs. 3,68,675/-. The above facts reveal that the assessee had net dividend income of Rs. 8,266/- and net LTCG of Rs. 11,82,580/-. The LTCG of Rs. 11,63,267/- was earned on redemption of four Mutual Funds and keeping in view the exempt income added in the taxable income under Section 115U of the Act and the expenditure incurred by the assesseee. We held that disallowance of Rs. 2,000/- would suffice from the expenditure incurred in earning the exempt income in the interest of justice.

In the result, the appeal of the assessee is partly allowed.

""थ" / The Respondent. 3. संबंिधत आयकर आयु" / Concerned CIT 4. आयकर आयु"(अपील) / The CIT(A)- 5. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER,