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2019 (5) TMI 852 - ITAT KOLKATADisallowance of Long Term Capital Loss (LTCL) of shares - HELD THAT:- 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 [2016 (4) TMI 300 - ITAT KOLKATA] in terms of the binding decision of Hon'ble jurisdictional High Court in the case of Smt. Nandini Nopany, [1997 (12) TMI 102 - CALCUTTA HIGH COURT] 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 to be unsustainable in law. The grounds of appeal are therefore allowed. Calculating gains on sale of land - LTCG OR STCG - section 50C application - AO admittedly applied sec.50 stipulating capital gains computation on transfer of depreciable assets to assess the said gains as STCG - HELD THAT:- AO admittedly applied sec.50 of the Act stipulating capital gains computation on transfer 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 therefore Administrative expenditure disallowed under third limb of Rule 8D - both parties fail to dispute that the CIT(A) has directed the Assessing Officer to re-compute the impugned disallowance qua the exempt income yielding investment only as per this tribunal’s co-ordinate bench’s decision in REI Agro Ltd. vs. DCIT (supra) upheld in hon'ble jurisdictional high court. The Revenue’s third substantive ground in both these two appeals is declined therefore. Non recording mandatory satisfaction us/1 4A r.w.s. 8D disallowance before computing the impugned disallowance - We find that the assessee had suo motu disallowed administrative expenditure whose correctness failed before the Assessing Officer as per the prescribed formula under Rule 8D. He declined the said computation therefore to arrive at the impugned administrative head expenditure of ₹44,45,411/-. We observe in these facts that the Assessing Officer had duly taken note of assessee’s computation as well as its relevant books of account before arriving at the impugned administrative disallowance. The assessee’s cross-objection is rejected therefore. We make it clear before parting that we have not touched upon the first head of direct expense (supra). The Revenue as well as latter assessee in their respective pleadings therefore. The assessee’s cross-objection 44/Kol/2018 raising the instant sole substantive ground fails therefore. MAT adjustment u/s 115JB on the 14A r.w.s. 8D disallowance - HELD THAT:- This tribunal’s special bench decision in ACIT vs. Viveet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] holds that said statutory provision does not cover any disallowance made u/s 14A read with Rule 8D. We according affirm the CIT(A)’s findings qua instant last issue as well.
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