TMI Blog2016 (4) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... ing before us the ld. Counsel for the assessee did not raise any contention to dispute the applicability of Rule 8D. The limited contention raised by him is that the assessee has already having made disallowance of ₹ 34,67,355/- under section 14A of the Act as against the disallowance of ₹ 80,46,448/- worked out by the AO by applying Rule 8D, the net addition should be made to the extent of ₹ 80,46,448/- - ₹ 34,67,355/-. We find merit in the contention of the ld. Counsel for the assessee. Accordingly, we direct the AO to restrict the addition on this issue to ₹ 45,79,093/-. - I.T.A. No. 1034/KOL/ 2012 - - - Dated:- 15-4-2016 - Shri P. M. Jagtap, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For the Petitioner : None For the Respondent : Shri Akal Dudhewala, ACA ORDER Per Shri S.S. Viswanethra Ravi This appeal by the Revenue filed against the order dt:16-04- 2012 passed by the CIT-(A)- VIII, Kolkata framed U/S 143(3) of the Act for assessment year 2008-09. 2. In Ground No 1 raised in this appeal, the Revenue has challenged the action of the ld. CIT(Appeals) in accepting the treatment given by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) disputing, inter alia, the treatment given by the Assessing Officer to the profit of ₹ 3,64,42,754/- from the transactions of purchase and sale of shares as business income instead of short-term capital gain. During the course of appellate proceedings, elaborate submissions were made on behalf of the assessee before the ld. CIT(Appeals) to meet all the objections raised by the Assessing Officer while treating the profit from share transactions as business income. The ld. CIT(Appeals) considered and discussed the submissions made by the assessee in respect of each and every point in detail in his impugned order as under:- I have carefully considered the submission made by the appellant along with the supporting/ evidences details furnished, perused the facts of the case including the impugned order and the other materials on record and I find substantial force in the argument of the appellant. It is noticed from the statement furnished that the appellant has valued the investments as on 30.03.2008 on the principle of lower of the cost or market valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not as profit and gains of business. In the light of the above discussion and observation, carefully considering the appellant's submission, perusing the entirety of the facts of the case including the impugned assessment order and other material on record and following the decision of my predecessor in the appellant's own cases for the earlier years on the same issue and on the identical facts, it is held that the income has rightly been disclosed by the appellant under the head short term capital gain and the same is to be assessed under that head and not as profit and gains of business as held by the AO. Therefore, the AO is directed to assess ₹ 3,64,42,754/- under the head short term capital gains. Thus, this ground of appeal is allowed. 7. After discussing all the relevant aspects of the matter in detail with reference to the facts and figure available on record, the ld. CIT(Appeals) found merit in the contention raised on behalf of the assessee before him that the Circular No. 4 of 2007 issued by the CBDT and relied upon by the Assessing Officer actually supported the case of the assessee keeping in view that two separate portfolios for the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated order dt:09-12-2015 in ITA 1790/KOL/2008 Batch cases passed by A bench of Kolkata Tribunal in assessee s own case and relevant portion of which reproduced herein below: 13. We have already extracted the relevant findings/ observations recorded by the ld. CIT(Appeals) in this regard in the foregoing portion of this order and a perusal of the same clearly shows that two separate portfolios were maintained by the assessee in respect of shares purchased and held as stock-in-trade and investment not only in the year under consideration but even in the earlier years and the claim of the assessee for short-term capital gain in respect of profit arising from the shares held in investment portfolio was accepted by the Assessing Officer in the earlier years including the immediately preceding year. As found by the ld. CIT(Appeals), separate Demat accounts were maintained by the asseessee for shares held as stock-in-trade and for shares held as investment and the fact that the shares held as investment were directly credited to the separate Demand account maintained for investment on the date of purchase itself clearly shows that the intention of the assessee right from the beg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of relevant facts and figures and the ld. D.R. at the time of hearing before us has not been able to bring anything on record to controvert or rebut the same. 15. If all the findings recorded by the ld. CIT(Appeals) in his impugned order as discussed above, which have remained unrebutted or uncontroverted by the ld. D.R. , are considered in the light of the relevant CBDT Circular No. 4 of 2007 as well as the judicial pronouncements cited on behalf of the assessee and relied upon by the ld. CIT(Appeals) in his impugned order, we find ourselves in agreement with the ld. CIT(Appeals) that the relevant shares were purchased and held by the assessee as investment and, therefore, the profit arising from the transactions of purchase and sale thereof is liable to tax in the hands of the assessee as short-term capital gain and not business income. The decision of the Coordinate Bench of this Tribunal in the case of Merlin Holding Private Limited involving similar issue and identical facts and circumstances, which has been upheld by the Hon ble Calcutta High Court, further supports our view. We, therefore, uphold the impugned order of the ld. CIT(Appeals) allowing the claim of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to a conclusion, but, however, observed that that proportionate expenses is required to be disallowed in earning of such exempt income and the following reasons given in page no- 12 of his impugned order:- In view of the findings and discussion above, after carefully considering the submission of the appellant, perusing the entire facts of the case including the impugned assessment order and other materials on record and respectfully following the judgement of the Hon'ble ITAT,Kolkata in the case of Balrampur Chini Mills Ltd.(supra), I am in agreement with the argument of the AR that the finding of the A a that long term capital gain was not chargeable to tax was factually incorrect as. 111 the instant case , the total income of the appellant for A.Y. 2008-09 was assessed U/S 115JB of the Act at ₹ 34,27,71,098/- which inter alia included income by way of long term capital gain and thereby suffered tax @ 10%. It is also seen that the AO did not point out any other infirmity in the appellant's working of the amount disallowable U/S 14A of the Act. In the light of the above findings and discussion, it is held that the disallowance U/S 14A made by the AO on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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