Pr. CIT v. Moonstar Securities Trading and Finance Co. (P) Ltd.

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The Tax Publishers2019 TaxPub(DT) 2998 (SC) : (2019) 263 TAXMAN 0458

INCOME TAX ACT, 1961

Section 261 Section 37(1)

Where the department preferred SLP to appeal against the judgment of Delhi High Court in Pr. CIT v. Moonstar Securities Trading and Finance Co. (P) Ltd. [ITA No. 81/2018, CM Appl. No. 2787/2018, ITA No. 83/2018, CM Appl. No. 2788/2018, dt. 24-1-2018] : 2018 TaxPub(DT) 5475 (Del-HC), whereby the High Court held that AO merely proceeded to reject such amount as expenditure and straightaway applied rule 8D without adducing any reasons, hence unless AO rejected the explanation or the rationale, which induced the assessee to offer particular amount as expenditure with some reasoning, the mere rejection per se cannot be accepted, the Supreme Court dismissed the SLP on the ground of delay as well as on merits.

Appeal (Supreme Court) - Special leave petition - Disallowance under section 14A - Expenditure in relation to exempt dividend income--reasons for invoking rule 8D not given by AO

Department preferred SLP to appeal against the judgment of Delhi High Court in Pr. CIT v. Moonstar Securities Trading and Finance Co. (P) Ltd. [ITA No. 81/2018, CM Appl. No. 2787/2018, ITA No. 83/2018, CM Appl. No. 2788/2018, dt. 24-1-2018] : 2018 TaxPub(DT) 5475 (Del-HC), whereby the High Court held that AO merely proceeded to reject such amount as expenditure and straightaway applied rule 8D without adducing any reasons, hence unless AO rejected the explanation or the rationale, which induced the assessee to offer particular amount as expenditure with some reasoning, the mere rejection per se cannot be accepted.Held:The Supreme Court dismissed the SLP on the ground of delay as well as on merits.

Affirmed:Pr. CIT v. Moonstar Securities Trading and Finance Co. (P) Ltd. [ITA No. 81/2018, CM Appl. No. 2787/2018, ITA No. 83/2018, CM Appl. No. 2788/2018, dt. 24-1-2018] : 2018 TaxPub(DT) 5475 (Del-HC)