Income Tax Appellate Tribunal Mumbai Stci Ltd. (Formerly Known As Securities ... vs Department Of Income Tax on 31 March, 2016 IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA no.2580/Mum./2013 (Assessment Year : 200809) Dy. Commissioner of Income Tax Range1(3), Aayakar Bhawan ................ Appellant 101, M.K. Road, Mumbai 400 020 PAN AACGS9709K v/s M/s. STCI Ltd. (Formerly known as Securities Trading Corp. of India Ltd.) A/B, 1802, AWing, 8th Floor Marathon |Innova, Marathon Nextgen ................ Respondent Compound, Off Ganpatrao Kadam Marg, Lower Parel (W), Mumbai 400 013 PAN AAGCS9709K ITA no.2500/Mum./2013 (Assessment Year : 200910) Dy. Commissioner of Income Tax Range1(3), Aayakar Bhawan ................ Appellant 101, M.K. Road, Mumbai 400 020 PAN AACGS9709K v/s M/s. STCI Ltd. (Formerly known as Securities Trading Corp. of India Ltd.) A/B, 1802, AWing, 8th Floor Marathon |Innova, Marathon Nextgen ................ Respondent Compound, Off Ganpatrao Kadam Marg, Lower Parel (W), Mumbai 400 013 PAN AAGCS9709K 2 M/s. STCI Limited M/s. STCI Finance ITA no.2306/Mum./2013 (Assessment Year : 200809) M/s. STCI Finance Ltd. (Formerly known as Securities Trading Corp. of India Ltd.) A/B, 1802, AWing, 8th Floor Marathon |Innova, Marathon Nextgen ................ Appellant Compound, Off Ganpatrao Kadam Marg, Lower Parel (W), Mumbai 400 013 PAN AAGCS9709K v/s Dy. Commissioner of Income Tax Range1(3), Aayakar Bhawan ................ Respondent 101, M.K. Road, Mumbai 400 020 PAN AACGS9709K ITA no.2307/Mum./2013 (Assessment Year : 200910) M/s. STCI Finance Ltd. (Formerly known as Securities Trading Corp. of India Ltd.) A/B, 1802, AWing, 8th Floor Marathon |Innova, Marathon Nextgen ................ Appellant Compound, Off Ganpatrao Kadam Marg, Lower Parel (W), Mumbai 400 013 PAN AAGCS9709K v/s Dy. Commissioner of Income Tax Range1(3), Aayakar Bhawan ................ Respondent 101, M.K. Road, Mumbai 400 020 PAN AACGS9709K Revenue by : Shri Ritesh Misra Assessee by : Shri Bhavin Shah a/w Ms. Vaibhavi Patel Date of Hearing 10.03.2016 Date of Order 30.03.2016 3 M/s. STCI Limited M/s. STCI Finance ORDER PER BENCH These cross appeals are directed against separate orders of the learned Commissioner (Appeals)2, Mumbai, pertaining to assessment years 200809 and 200910. ITA no.2306/Mum./2013 Assessee's Appeal Grounds raised by the assessee are as under: "1. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in not allowing deduction of indemnity payment to the tune of ` 5,10,00,000 incurred in connection with transfer of shares in UTI Securities Ltd. for the purpose of computation of capital gains, without appreciating that the said expenditure was incurred wholly and exclusively in connection with transfer of the said shares." 2. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in confirming disallowance of expenditure under section 14A to the tune of ` 1,53,10,783." 2. As far as ground no.1 is concerned, facts in brief are, assessee a NonBanking Financial company is engaged in trading of Government securities, PSU bonds, commercial derivatives, equity and equity derivatives, mutual funds apart from lending against shares. As stated, in the financial year 200607, assessee acquired 100% stake in UTI Securities Ltd. (UTISL) for a consideration of ` 265 crore, as a result