TMI Blog2018 (8) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... A examined the books of account, ledger account of assesse and records of broker of M/s. SSPL and found satisfied that the transaction in respect of share i. e order date, trading and time etc were recorded. - No additions - Decided against the revenue. - I.T.A No. 1159/kol/2015 - - - Dated:- 8-8-2018 - Shri J. Sudhakar Reddy, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For the Appellant : Shri A.Bhattacharjee, Addl.CIT, ld.Sr.DR For the Respondent : Shri P.J Bhide, FCA, ld.AR ORDER Shri S.S. Viswanethra Ravi, JM: This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals), 2, Kolkata dt. 19-06-2015 for the A.Y 2010-11. 2. Brief facts of the case are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to deletion of disallowance made u/s. 14A of the Act. 6. After hearing both the parties and perusing the record, we find that the AO found that the assesse has shown dividend income to an extent of ₹ 11,94,522/-. The assesse contended that the dividend earned on the stock, which was held as stock-in-trade and as such no disallowance of expenditure can be made. The CIT-A held that no such disallowance can be made by invoking Rule 8D(2) in respect of shares held as stock-in-trade and as such deleted the addition made on this issue by the AO. The Hon ble Supreme Court in the case of Max opp Investment Ltd reported in (2018) 91 taxman.154(SC) held the provisions of section 14A of the Act would be applicable even when the shares are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividend income over and above the figure of ₹ 12,881/- suo-moto disallowed by the assesse. We find that the ld. AO cannot directly resort to the computation mechanism provided in Rule 8D(2) of the Rules for the purpose of making disallowance u/s. 14A of the Act. It is incumbent on the part of the ld.AO to verify the accounts of the assesse and ascertain the amount of disallowance from the said accounts u/s. 14A of the Act. Accordingly, we deem it fit and appropriate in the interest of justice and fair play, to remand this issue to the file of ld.AO for de novo adjudication. Accordingly, ground raised by the revenue is allowed for statistical purpose. 7. In view of above, the impugned order of the CIT-A on this issue is set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f NSE, as it was in the off market transaction and STT was duly charged and paid by the assesse. The AO found that the replies of assesse were contradictory and being not satisfied, added an amount of ₹ 69,53,809/- to the total income of asssessee. 10. In the first appellate proceedings, it was contended that the assesse is a member of Bombay Stock Exchange. In Future Option ( F O ) transaction in the derivatives segment, are carried out at National Stock Exchange (NSE). The said transactions have been duly reflected in the financial account in the books of broker of M/s. SSPL. Due to off market transaction, the assesse did not enter into the transaction and the broker of SSPL did not inform the NSE and in support of this, file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat claim of assesse regarding the purchase of shares was bogus and no such shares was purchased by the assesse. Consequently, sale of shares were held to be as bogus and added the same as unexplained investment u/s. 69 of the Act. The CIT-A confirmed the addition made on account of purchase and sale of shares as bogus as viewed by the AO. The Tribunal held that the purchase of shares were entered into the books of assesse and also reflected in the balance sheet and declared the same in the return of income. Further, purchase and sale of shares were outside the floor of stock exchange is not an unlawful activity and off market transactions are not illegal and as such deleted the addition made by the AO as confirmed by the CIT-A. The Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the Revenue that the shares in question are still lying with the Assessee nor it is the case of the Revenue that the amounts received by the Assessee on sale of the shares is more than what is declared by the Assessee. Though there is some discrepancy in the statement of the Director of M/s. Richmand Securities Pvt. Ltd. regarding the sale transaction, the Tribunal relying on the statement of the employee of M/s. Richmand Securities Pvt. Ltd held that the sale transaction was genuine. 7. In these circumstances, the decision of the ITAT in holding that the purchase and sale of shares are genuine and therefore, the Assessing Officer was not justified in holding that the amount of ₹ 1,41,08,484/- represented unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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