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TMI Blog2018 (4) TMI 1573X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee and ascertain the amount of disallowance from the said accounts u/s 14A of the Act. - Matter remanded back to AO. - I.T.A No. 2204/Kol/2016 - - - Dated:- 11-4-2018 - Hon ble Shri M. Balaganesh, AM Hon ble Shri S.S. Viswanethra Ravi, JM] For the Appellant- Shri S.D. Verma, FCA And Shri Sanjeev Kadel, FCA For the Respondent- Shri A. Bhattacharjee, Addl. CIT ORDER Per M. Balaganesh, AM 1. This is an appeal of the assessee directed against the order passed by the Learned Commissioner of Income Tax (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Rule 8D of the Rules by applying the third limb of Rule 8D(2) and arrived at the disallowance figure of ₹ 38,93,332/- and added the same in the assessment. 4. The Ld. CIT(A) observed that the assessee firm is engaged only in the business of share trading, commodity derivatives, currency derivatives and has never held any investments as mentioned by the ld. AO in the assessment order in the relevant column under nature of business . He agreed to the contentions of the assessee that the provisions of section 14A of the Act read with Rule 8Dof the Rules cannot be invoked when the shares were held as stock-in-trade. He placed reliance on the decision of Co-ordinate Bench of this Tribunal in the case of DCIT vs Gulshan Investment Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 14A in respect of shares held as stock-in-trade has been settled by the aforesaid Hon'ble Supreme Court s decision. Now, the short point that arises for our consideration is as to what amount could be disallowed by the ld. AO. The ld. AO in the instant case, had applied the third limb of Rule 8D(2) of the Rules and made disallowance of ₹ 38,93,332/-. The assessee has made suo-moto disallowance in its return of income in the sum of ₹ 12,881/- towards demat charges. The ld. CITA had restricted the total disallowance of ₹ 9,47,339/- being 10% of dividend income over and above the figure of ₹ 12881/- suo-moto disallowed by the assessee. We find that the ld. AO cannot directly resort to the computation mechanis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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