TaxTMI 
TaxTMI 
2017 (9) TMI 647
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....he facts and circumstances of the case and in law, the CIT(A) erred in holding that provisions of Rule 8D2(iii) is not applicable in respect of shares held as stock in trade in view of the fact that recently ITAT, Mumbai Bench in the case of Damani Estates & Finance Pvt. Ltd. held that the words used in Rule 8D are value of investment and not held as investment." 3. Brief facts of the case are that the AO observed that the assessee has earned dividend income of Rs. 51,84,650/- and long term capital gain of Rs. 2,11,547/- which the assessee claimed as exempt u/s. 10(34) and 10(38) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") respectively. So, he asked the assessee as to why disallowance of the expenses should not be ....
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....he aforesaid decision of the Ld. CIT(A), the revenue is in appeal before us. 4. We have heard rival submissions and have gone through the case records carefully. We note that the Ld. CIT(A) by following the order of this Tribunal has held that ½ percentage of the average value of investment prescribed under Rule 8D(2)(iii) of the Rules shall be computed on the dividend bearing scrips. The Hon'ble Calcutta High Court in GA No. 1150 of 2015, ITAT No. 52 of 2015, CIT Vs. M/s. G K K Capital Markets (P) Ltd. dated 10.02.2017 wherein their Lordships upheld the Tribunal decision that once the assessee has kept the shares as stock in trade, the Rule 8D of the Rules will not apply. Therefore, we reiterate the view taken by the coordinate b....
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....rieved, the assessee preferred an appeal before the Ld. CIT(A) who gave partial relief to the assessee and restricted the addition to Rs. 33,98,930/-. Aggrieved by the partial relief granted to the assessee, the revenue as well as the assessee is in appeal before us. 7. We have heard rival submissions and gone through the facts and circumstances of the case. We note that during the year ended 31.03.1998 the assessee had borrowed a sum of Rs. 65,00,000/- through banking channel from M/s. India Foils Ltd. and the said principal amount of loan together with interest amounting to Rs. 1,10,62,519/- as on 31.03.2002 which comprised of the principal amount of Rs. 65,00,000/- and interest amount of Rs. 45,62,519/-. During the year ended 31.03.19....
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....xplains why no interest has been paid on the loan amount taken from M/s. SISL and India Foils Ltd., which got merged with M/s. MCL w.e.f. 01.04.2002. We also note from a perusal of the statement recorded u/s. 131 of the Act of the Director of M/s. MCL that they were hopeful for realizing the principal amount at least in part to question no. 12 of the AO. In respect to question no. 5, the Director has answered that he joined as Director only in the year 2003 and the same balance was lying with no movement. We note that the assessee in its Balance Sheet as on 31.03.2010 relevant to AY under consideration, the total principal amount of loan of Rs. 4,15,00,000/- and outstanding interest amounting to Rs. 4,98,36,769/- is shown in the liability s....
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....i (assessee). We note that Rs. 8,02,74,250/- was transferred from 01.04.2002 to M/s. MCL and on perusal of page 79, which is account statement in the name of M/s. India Foils Ltd. in the books of M/s. Banwari Lall Passari (assessee) an amount of Rs. 1,10,62,519/- was transferred from 01.04.2002 to M/s. MCL which comes to Rs. 9,13,36,769/- transferred to M/s. MCL as on 01.04.2002 as per the merger ordered by Hon"ble Calcutta High Court. However, we note that the Director of M/s. MCL in his statement u/s. 131 of the Act has stated that he joined M/s. MCL only in the year 2003 and that the debt was lying with no movement. In such a scenario, we can safely infer that the amount of Rs. 9,13,36,769/- was lying with M/s. MCL as on 01.04.2002. The ....