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ITAT confirmed CIT(A)’s order deleting disallowance of interest expenses
ITAT confirmed CIT(A)’s order deleting disallowance of interest expenses
Linear Commercial Pvt Ltd declared dividend income. Assessee disallowed interest expenses u/s 14A (of Income Tax Act, 1961). AO rejected assessee’s working of disallowance of interest expenses and AO reworked disallowance u/s 14A (of Income Tax Act, 1961). CIT(A) upheld AO’s order. ITAT held that AO disallowed interest after taking into account shares held as investment and stock in trade and total value of balance sheet was taken after adjusting current liabilities. ITAT confirmed CIT(A)’s order. - 500500
1. Linear Commercial Pvt Ltd was a Non Banking Finance Company (NBFC) and engaged in share trading.
2. It declared dividend income of Rs 12.73 lakhs, out of which of Rs 12,44,545 was represented out of shares lying in inventory and Rs 29,000 was represented from the share/mutual funds lying as investment in the books of account of assessee.
3. Assessee disallowed the interest expenses from its computation of income u/s 14A (of Income Tax Act, 1961).
4. AO was not satisfied with the working of the disallowance of the interest expenses and rejected the same.
5. AO worked out the disallowance of interest u/s 14A (of Income Tax Act, 1961).
6. CIT(A) upheld AO’s order.
On appeal, the ITAT held as under:
7. We find from the aforesaid discussion that the AO has disallowed the interest after taking into account the shares held as investment and stock in trade and total value of the balance sheet was taken after adjusting the current liabilities.
8. We find no infirmity in the order of CIT(A) the ground of appeal of the Revenue is Dismissed.
Case Reference - Income Tax officer V/s. Linear Commercial Pvt Ltd.
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH "A" KOLKATA
Before Shri Mahavir Singh, Judicial Member and
Shri Waseem Ahmed, Accountant Member
ITA No.158/Kol/2013
(Assessment Year : 2009-10)
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