TMI Blog2015 (6) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... ownership of the assets will also get transferred in favour of the person from whom the assessee has taken the loan. This is an undisputed fact that the shares continued to be shown in the balance-sheet of the assessee. In view of this fact, in our opinion, the ld. CIT (Appeals) has rightly held that the period of pledge cannot be excluded for determining the period of holding of shares by the assessee. Ld. D.R. even though vehemently relied on the order of the Assessing Officer but could not adduce any decision in its favour which has taken a contrary view. It is not a case where the shares were sold by the assessee to the parties from whom the assessee has taken the loan. In view of this fact, we do not find any illegality or infirmity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We accordingly delete the disallowance - Decided in favour of assessee. - I.T.A. No. 1713/KOL/ 2010, C.O. No. 159/Kol/2010, I.T.A. No. 42/KOL/ 2011, C.O. No. 08/Kol/2011, - - - Dated:- 13-4-2015 - Shri P.K. Bansal And Shri Mahavir Singh JJ. For the Appellant : Shri K.L. Kanak, JCIT, Sr. D.R. Fore the Respondent : Shri A.K. Tibrewal, FCA ORDER Per P.K. Bansal: Both these appeals and the Cross Objec tions arise out of the order of the ld. Commissioner of Income Tax (Appeal s)-XX, Kolkata in Appeal No. 482/CIT(A)-XX/Ci r.-35/07-08/Kol. No. 89/CIT(A)-XX/Cir.-35/09- 10/Kol. dated 02.06.2010 and 03.06.2010 respectively for the same assessment year 2005-06, passed against the order of the Assessing Officer under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een filed against the same order of the ld. CIT(Appeals) but taken the same grounds of appeal. ITA 1713/Kol/2010 has been filed by the Revenue wi thin time limit while ITA No. 42/Kol/2011 is barred by limitation by 128 days for which no condonation petition was filed. Since the ITA No. 42/Kol/2011 and Cross Objection arising thereon being No. 08/Kol/2011 arise out of the same order of the ld. CIT(Appeals), which was communicated to the Revenue on 06.07.2010, against which ITA No. 1713/Kol/20210 and Cross Objection No. 159/Kol/2010 have been filed. We, therefore, dismiss the ITA No. 42/Kol/2011 and C.O. 08/Kol/2011 being filed twice as infruc tuous. 5. Grounds No. 1 2 in Revenue s appeal (ITA No. 1713/Kol/2010) relates to the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ownership of the shares always remained with the assessee. The assessee has duly shown the shares in its balance-sheet. Merely transfer of shares from the demat account for the purpose of giving security does not mean that the assessee was not holding those shares. Ld. CIT(Appeals), therefore, took the view that the period of pledge cannot be excluded for determining the period of share holding. Accordingly these shares were assessed as long-term capital gain. 7. We have heard the rival submissions and carefully considered the same along with the order of the tax authorities below. It is not denied that the shares were duly held by the assessee. The assessee has taken the loans after pledging the shares to the loan creditors. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal relates to the deletion of the disallowance made under sec tion 40A(2)(b) of the Act. 10. The Assessing Officer noted that the assessee has paid in cash at the rate of 10% to Shri Jyoti Vardhan Sonthalia, Karta, of the assessee-HUF. It was also noted by the Assessing Officer that the assessee has paid interest to the loan creditors at the rates varying from 9% to 13%. The Assessing Officer therefore took the view that the interest paid to the Karta of the HUF at the rate of 10% is higher and therefore, disallowed ₹ 22,788/- by applying the provisions of section 40A(2)(b). When the matter went before the ld. CIT(Appeals), ld. CIT(Appeals) noted that the assessee had taken loans from 23 creditors out of which interest has been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance made by the Assessing Officer under Rule 8D read with section 14A of the Act. 15. After hearing the rival submissions and going through the order of the tax authorities below, we find that the Assessing Officer noted that the assessee has derived exempt dividend income at ₹ 1,20,451/- and interest on PPF at ₹ 44,890/- totalling to ₹ 1,65,341/-. The Assessing Officer made a disallowance of ₹ 10,80,022/- just by applying Rule 8D. Rule 8D read with section 14A has been inserted by the Income Tax (5th Amendment) Rules, 2008 w.e.f. 24.03.2008. Hon ble Mumbai High Court in the case of Godrej Boyce Mfg. Co. Limited -vs.- DCIT reported in 328 ITR 81 has categorically held that Rule 8D is prospective and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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