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2014 (3) TMI 463 - ITAT KOLKATADeletion of difference on account of excess purchases and sales – Held that:- CIT(A) was of the view that the assessee shows purchases and sales on the basis of value of each transaction it has entered into to derive true profit or loss on such transaction - the figures of Purchases and sales in Form 1ODB are without Brokerage while the assessee has to account for all the transactions net of Brokerage - The CIT(A) has considered the reconciliation statement which was also filed before AO but he has not considered fact that there is brokerage which has to be taken into account and the assessee has accounted for sales as well as purchases on the basis of net of brokerage - Once this fact has been considered by the CIT(A) and even now revenue could not point out any defect in the reconciliation statement – there is no reason to interfere in the order of CIT(A) – Decided against Revenue. Deduction on account of settlement guarantee fund – Held that:- The amount on account of payment of settlement guarantee fund by the calcutta Stock Exchange Ltd. was borne by all the members of Calcutta Stock Exchange vide rules and regulation of the exchange - The financial contribution compulsorily collected by Stock Exchange of which assessee is a member and who is also governed by rules and regulations of the Calcutta Stock Exchange is not penalty - assessee never defaulted in Calcutta Stock Exchange at any point of time and this payment made was for the better functioning of Calcutta Stock Exchange, which in no way can be called as penalty in nature – thus, the CIT(A) has rightly allowed the claim of the assessee – Decided against Revenue. Disallowance u/s 14A of the Act r.w. Rule 8D of the Act – Held that:- CIT(A) was of the view that the assessee's books of account are clear and no defect is pointed out by the AO in the interest free fund position explained by the assessee or in the books of account of the assessee which proves that borrowed funds were not used for the purposes of making the investments, the disallowance cannot be made - Assessee contended that no satisfaction whatsoever has been recorded by the AO regarding correctness of accounts of the assessee no diwsallowance can be made u/s. 14A of the Act read with Rule 8D of the Rules - As regards to AY 2008-09, the CIT(A) specifically made disallowance of demat charges and 0.50% on average value of investment - Once the CIT(A) held that there is no defect pointed out by AO and there is no satisfaction that the borrowed funds were used for making investment, the disallowance is unwarranted – Decided in favour of Assessee.
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