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2017 (9) TMI 647 - AT - Income TaxAddition u/s 14A - provisions of Rule 8D2(iii) applicability in respect of shares held as stock in trade - Held that:- 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 CIT Vs. M/s. G K K Capital Markets (P) Ltd. [2017 (2) TMI 628 - CALCUTTA HIGH COURT] 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 bench in REI Agro Industries Ltd. Vs. DCIT [2013 (9) TMI 156 - ITAT KOLKATA] and so, we do not find any merit in the ground of appeal raised by the revenue and hence, it stands dismissed. Addition u/s. 41(1) - remission of liability - Held that:- In the present case, there is nothing on record to suggest that there was remission or cessation of liability in the AY 2010-11. On the contrary, as per the statement of the Director of M/s. MCL recorded by AO on that u/s. 131 of the Act suggests that when he joined as a Director only in 2003 the same balance was lying with no movement which suggests that the remission of ₹ 33,98,930/- has taken place between 01.04.2002 and 31.03.2003 and not in this assessment year. In such a scenario, section 41(1) of the Act has no application in this assessment year and, therefore, we direct deletion and allow assessee’s appeal.
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