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TMI Blog2015 (10) TMI 2800X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order reveals that the AO has not followed the guidelines of objective satisfaction as laid down by the Hon ble Bombay high Court in the case of Godrej Boyce [ 2010 (8) TMI 77 - BOMBAY HIGH COURT ] while making the disallowance . He without recording any reasoning for his dissatisfaction with regard to the working/claim of the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A of the Income Tax Act. The ld. CIT(A) also ignored the mandate of the provisions of section 14 A, while confirming the disallowance. So keeping in view of the overall facts and circumstances of the case, we restore this issue back to the file of the AO with a direction that the AO will give opportunity to the assessee to place on record all the relevant facts including its accounts and then examine the computation/calculation made in this regard by the assessee having regard to the accounts of the assessee. The AO will be at liberty to call for any record/evidences or statement etc. from the assessee as may be required by him for deciding the issue under consideration. After going through the details provided by the assessee, the AO will decide the issue by way of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es carried on of trading in shares. (d) As in the earlier years, the appellant continued to be an investor in shares. (e) The appellant was not a trader vis-a-vis the shares, which have yielded income/Loss under the head 'Short Term Capital Gains/Loss', as disclosed in the return of income filed. (2) The learned Commissioner of Income (Appeal) Tax erred in disallowing ₹ 2492,047/u/s 14A of the Income Tax Act as expenditure incurred in relation to earning of exempt income and in computing the disallowance u/r 8D(2) of Income Tax Rules. (3) The learned Commissioner of Income (Appeal) Tax erred in disallowing interest expenses of ₹ 11,89,256/- on interest free loan given (4) The learned Commissioner of Income (Appeal) erred in charging interest u/s 234A, 234B, 234C and 234D and having regard to the facts and circumstances of the case and in law the appellant denied its liability for payment of any interest under the aforesaid sections. (5) The learned Commissioner of Income (Appeal) erred in initiating penalty proceedings u/s 271(1 )(c) in spite of the fact that the appellant had neither concealed his income nor had filed inaccurate particulars of income. 3. A peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness loss. However, since the findings of the Ld. CIT(A) for A.Y. 2006-07 have been reversed by the Tribunal by order dated 21.08.13 and it is also an admitted fact that the investment pattern/ share transaction activity is almost identical to that of the earlier assessment year, hence, applying the same ratio and for the sake of principle of consistency, we hold that the short term capital loss returned by the assessee has to be treated as such and not as business income of the assessee. This issue is accordingly decided in favour of the assessee. 6. Vide Ground No.2, the assessee has agitated the disallowance of ₹ 24,92,047/- under section 14A of the Act in relation to the expenditure incurred for earning of exempt income. The AO found that the assessee had earned exempt dividend income. The assessee had incurred interest and other expenses for earning of such dividend income. He, therefore, computed the disallowance under section 14A read with rule 8D at ₹ 24,92,047/- and added back the same into the income of the assessee. During the appellate proceedings before the Ld. CIT(A), the assessee submitted that the AO had not given an exact finding of incurring of expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfaction with regard to the working/claim of the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A of the Income Tax Act. The ld. CIT(A) also ignored the mandate of the provisions of section 14 A, while confirming the disallowance. 9. So keeping in view of the overall facts and circumstances of the case, we restore this issue back to the file of the AO with a direction that the AO will give opportunity to the assessee to place on record all the relevant facts including its accounts and then examine the computation/calculation made in this regard by the assessee having regard to the accounts of the assessee. The AO will be at liberty to call for any record/evidences or statement etc. from the assessee as may be required by him for deciding the issue under consideration. After going through the details provided by the assessee, the AO will decide the issue by way of a speaking order in the light of the observations made above. Needless to say, the assessee will co-operate and promptly supply the necessary details etc. to the AO for deciding the issue under consideration. We accordingly restore the matter to the file of the AO to decide this i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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