A pvt ltd company sold a stake of 15% to private equity for 300 crores. The company invested this money for time being in mutual funds and earned dividends of Rs. 25 crores. As per Rule 8D expenditure was not disallowed and the AO disallowed some amount on the basis of Average investments * 0.5% and the assessment order was passed. Is the income received by investment of share capital is revenue in nature?
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Income - Capital or revenue in nature
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If the company can prove amount invested in mutual funds in amount raised through private equity then such amount is capital receipt and there will be no disallowance
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