Case Law Details
Brief of the Case
ITAT Kolkata held In the case of DCIT vs. M/s G.K.K. Capital Markets (P) Limited that in case AO has not recorded satisfaction about the correctness of the claim of the assessee and straight away calculated the disallowance u/s 14A read with rule 8D, this disallowance is not maintainable.
Also it is clear that the AO could not find any fault in the computation of disallowance made by assessee and 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, the rule 8D will not apply.
Facts of the Case
The assessee is in the business of share trading. The assessee declared short term capital gains arising from shares as business income but declared the profit arising from the transaction of shares as long term capital 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 read with rule 8D of the I. T. Rules, 1962.
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