Avinash Kumar (CA Final Student & Working as Deputy Manager Accounts) (79 Points)
23 September 2015Dear All,
Good Day!!
Very Urgent
Our compnay has earned Rs. 15 Lacs(STT Paid) long term capital gain which is exempt and we have a wholly owned subsidiary (around 97% share). Our subsidiary has neither declared any dividend nor has paid. Both the Holding and subsidiary are closely held public compnay.
Please advice in this case we would disallow expenditure or not? If yes, will investment in subsidiary be base to disallow any expenditure?
Rashi Bajaj
(CA)
(752 Points)
Replied 23 September 2015
Expenditure will be disallowed only if nexus is proved to earning of exempt income. Merely earning income from investments does not give base to disallow expenses. However, costs such as any brokerage paid to transact in shares, holding costs, etc. may be disallowed. Further, Investment in subsidiary is no base to disallow expenses.
sagar
(Student)
(49 Points)
Replied 24 September 2015
Avinash Kumar
(CA Final Student & Working as Deputy Manager Accounts)
(79 Points)
Replied 25 September 2015
Thank you for wothful replies !!
Further I want to know whether Long Term Capital Gain(on Which STT is paid) is exempt income or not taxable?
In my openion it should not be exempt as it is not taxable because we have paid STT on it.
My question is in relation to Section 14 A
manish jain
(sr associate)
(63 Points)
Replied 25 September 2015
As per my understanding, the same is exempted income
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