TMI Blog2019 (5) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... r of depreciable assets to assess the said gains as STCG. The CIT(A) s order in both cases has partly accepted the assessee s arguments that they had not claimed any depreciation regarding land in question by including in their respective block of assets for the purpose of computing depreciation. He has directed the AO to verify the relevant fact in this regard. We conclude these peculiar facts that the Revenue cannot be held to be an aggrieved party against the CIT(A) s findings at this stage since the issue is very much open before the Assessing Officer as to whether assessee had included the relevant land in their block of assets or no so as to attract sec. 50 Disallowance u/s 14A r.w.r 8D - HELD THAT:- This tribunal s decision in REI Agro Ltd. vs. DCIT [ 2013 (9) TMI 156 - ITAT KOLKATA] as upheld in CIT vs. Reliance Utilities and Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] holds that necessary presumption that arises in such a case is of deployment of interest free investments funds only in exempt income yielding investments. We do not find any merit in Revenue s former argument regarding Rule 8D(2)(ii) of the Income Tax Rules, 1962 proportionate interest issue theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue has field its appeal ITA No.199/Kol/2018 former assessee s case against the Commissioner of Income Tax (Appeals)-10 Kolkata s dated 17.11.2017 passed in case No.391/CIT(A)-10/Cir-6/2010-11. Its second appeal latter assessee s case ITA No.303/Kol/2018 and taxpayer s cross objection No.44/Kol/2018 are directed against the CIT(A)-10, Kolkata s order dated 01.12.2017 passed in case No.390/CIT(A)-10/Cir-6/10-11/2014-15/Kol. Relevant proceedings are u/s 143(3) of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case file(s) perused. 2. Both the Learned representatives are fair enough during the course of hearing that all issues raised in the instant three cases are identical in nature. We have heard the instant lis together. The same are disposed of by our detailed adjudication. 3. The Revenue s identical first substantive grievance challenges correctness of CIT(A) s order reversing Assessing Officer s action disallowing assessee s Long Term Capital Loss (LTCL) of shares sale amounting to ₹6,07,02,817/- and ₹20,95,69,036/-; respectively. Its case is that the CIT(A) has erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24,96,836 3,60,000 8,63,364 2 U-Tor Construction Steel Ltd 1,51,671 96,40,050 1,40,80,920 1,72,22,242 31,41,322 3 Usha Breco Ltd 1,15,866 11,58,660 32,83,736 31,50,397 (-) 1,33,339 4 LancoInfratech Ltd 596 3,17,905 3,45,216 2,16,556 (-) 1,28,660 Total 1,24,83,951 2,02,06,708 2,39,49,195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. We have heard both the parties and perused thee materials available on record. Ld. AR submitted paper book which is running at pages 1 to 71 and index of case laws which is running at pages 1 to 43. On analyzing the case decision of Hon'ble Supreme Court in the case of McDowell Co Ltd. (supra) it would be found that tax planning may be legitimate provided it is within the framework of law . In the case on hand, the genuineness of the transactions is not doubted. There is no allegation that the losses incurred on sale of shares are not authorized or illegal. Ld. AR submitted that when the transactions are genuine and within the ambit of legal provisions, the same could not be termed as colourable devise on the ground that the said transaction resulted in reduction of taxes. The assessee submits that if the decision of Hon'ble Supreme Court in the case of McDowell And Co. Ltd. (supra) is understood in that sense then every transaction resulting in losses or where there exists provisions relation to exemption of income from tax would be considered as colourable devise. In such cases, even the tan of LTCG on sale of STT paid shares securities resulting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional High Court in the case of CIT v. Smt. Nandini Nopany (1998) 230 ITR 679 (Cal), wherein the Hon'ble jurisdictional High Court has held:- Upon consideration of all the above facts and also the question that the market value of the shares transferred by the assessee was ₹ 20,67,876, the Assessing Officer rejected the contention of the assessee regarding the transfer of shares and added the difference between the amount of ₹ 13,34,392 and ₹ 20,67,876 and thus held that the assessee had earned an income of ₹ 7,57,382. Being aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) who after considering the facts and circumstances of the case reversed the order of the Assessing Officer being of the opinion that there was no case for substituting the disclosed value of consideration on transfer by the shares and he accordingly deleted the addition made on that account in the income of thee assessee by the Assessing Officer. Being aggrieved, the Revenue filed an appeal before the Tribunal. The Tribunal upheld the finding of the Commissioner of Income-tax (Appeals) by agreeing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee are allowed. [Unquote] 4. Thus, in the light of the said observations of the Hon'ble jurisdictional ITAT in similar and identical facts in the own case of the assessee for the assessment Year 2009-10, in terms of the binding decision of Hon'ble jurisdictional High Court in the case of Smt. Nandini Nopany, it is held that the action of the Ld. AO in making the impugned disallowance of losses of ₹ 6,07,02,817 claimed on sale of shares of group companies and the recomputation of the Profit from the said transactions in the sum of ₹ 37,42,487 to be unsustainable in law. The grounds of appeal are therefore allowed. 5. Learned CIT-DR fails to dispute the clinching fact that Revenue s pleadings have nowhere pin-pointed any exception on facts or law in impugned assessment year 2010-11 in assessees cases vis- -vis those involved in said preceding assessment year. We make it clear that there is no dispute about the genuineness of the assessee s share transactions per se. Coupled with this, learned co-ordinate bench has admittedly followed hon'ble jurisdictional high court (supra) settling the law on the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 252 and ₹44,45,411/- totaling to ₹44,45,663/- (supra). the CIT(A) s order in former assessee s case holds that the assessee s interest free funds are much more than its corresponding investments in tax free income investment as on 31.03.2009 and 31.03.2010 reading figures of ₹6,94,646/- and ₹154,552.116; respectively. The assessee s share capital, reserves and surplus funds have figures of ₹564,23,750/- and ₹457,976,819.64; respectively i.e. more than its tax free investments. This tribunal s decision in REI Agro Ltd. vs. DCIT [20113] 35 taxmann.com 404 (Kolkata-Trib.) as upheld in hon'ble jurisdictional high court s as well as hon'ble Bombay high court s decision in CIT vs. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom) holds that necessary presumption that arises in such a case is of deployment of interest free investments funds only in exempt income yielding investments. We do not find any merit in Revenue s former argument regarding Rule 8D(2)(ii) of the Income Tax Rules, 1962 proportionate interest issue therefore 8. Coming to last head in former assessee s case and sole head in latter assessee s case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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