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TMI Blog2015 (10) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... raight away embarked upon computing disallowance under Rule 8D of the Rules on presuming the average value of investment at 1/2% of the total value. Respectfully following the decision in the case of J. K. Investors (Bombay) Ltd. [2013 (5) TMI 580 - ITAT MUMBAI] ground of appeal of revenue is dismissed. Even otherwise, on merits also the assessee had made disallowance itself and filed computation of disallowance as per rule 8D of the Rules. The AO could not find any fault in the computation of disallowance made by assessee and secondly, the assessee does not have any investment and all the shares are held as stock in trade, as is evident from the orders of the lower authorities. Once, the assessee has kept the shares as stock in trade, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gains also. The assessee also declared dividend income. The AO assessed short term capital gain as well as long term capital gains as business income. To this, the assessee has not objected. The assessee objected only against disallowance of interest and disallowance of average value of investment made by AO by invoking the provisions of section 14A of the Act read with rule 8D of the I. T. Rules, 1962 (hereinafter referred to as the Rules ). For this disallowance, the AO recorded the facts as under: The assessee has submitted two computations for disallowances u/s. 14A vide letter dated 26.11.2010. If the long term capital gain is allowed and treated as exempt income' the assessee has offered disallowance of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by AO, the assessee preferred appeal before CIT(A), who deleted the disallowance by observing as under: 8. I have carefully considered the observations of the Assessing Officer in the assessment order and submissions of the appellant. The appellant during the appellate proceedings submitted that it has earned a dividend of ₹ 62, 11,320/- only and has himself disallowed an amount of ₹ 37,28,966/-. The assessee does not have any now investment and all the shares are being held as stock in trade only as per the order of the Assessing Officer (supra). It is held that Rule 8D is not applicable in the case of assessee since now there are no investments and all the shares are being treated as stock in trade only and fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(iii) is hereby deleted. Aggrieved, revenue came in appeal before Tribunal. 5. We have heard rival contentions and gone through facts and circumstances of the case. At the outset, Ld. counsel for the assessee Shri A. K. Tibrewal raised a legal issue that there is no satisfaction recorded by the AO for invoking the provisions of section 14A read with Rule 8D of the Rules. Ld. counsel for the assessee stated that this issue is now covered by the decision of Hon'ble jurisdictional High Court in the case of CIT Vs. R.E.I. Agro Ltd. in GA 3022 of 2013, ITAT 161 of 2013 dated 23.12.2013, wherein the order of Tribunal in DCIT Vs. R.E.I. Agro Ltd. of ITA No. 1811/Kol/2012 for AY 2009-10 dated 14.05.2013 was confirmed. The Tribunal in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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