2013 (3) TMI 437

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....ollows:- 2. The assessee earned a sum of Rs.2,85,08,419/- on account of dividend which is not taxable. The assessee earned interest amounting to a sum of Rs.2,68,75,491/-. The assessee paid interest amounting to a sum of Rs.4,49,02,775/-. No expenditure with respect to the aforesaid nontaxable income was shown. Out of the interest paid by the assessee, a sum of Rs.1,33,51,132/- was shown as interest paid towards the nontaxable income. On the aforesaid basis, a total loss was computed at a sum of Rs.85,93,770/- which was accepted by the Assessment Officer. The C.I.T. in exercise of power under Section 263 directed the Assessment Officer to pass a fresh order in accordance with law and to make appropriate disallowance under Section 14 A of....

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....e funds available and the funds deployed, it has not discharged its onus. Therefore, the entire gross interest paid of Rs.4,49,02,775/- should have been taken for the purpose of disallowance U/s. 14A of the I.T. Act.    The assessee's contention that this is a case where the estimate of the Assessing Officer is being substituted by the estimate of the CIT is not correct. As mentioned above, this is actually a case in which the Assessing Officer failed to appreciate the facts of the case. Therefore, the assessment order passed by him is clearly erroneous and prejudicial to the interest of the Revenue". 3. The learned Tribunal reversed the order of the C.I.T. in an appeal preferred by the assessee on the basis of the following....

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....e I. T. Act were followed by the assessee by disallowing a sum of Rs.1.33 crores in its computation of income? (B) Whether the order passed by the CIT was based on a mere change of opinion? 5. Mr. Murarka, learned senior Counsel appearing on behalf of the assessee submitted that the method of determining the amount of expenditure in relation to income not includible in the total income introduced with effect from 24th March, 2008 was not there in the rules at the time when the order under challenge was passed by the Tribunal. Nonetheless, the method indicated in Rule 8D, introduced on 24th March, 2008, has been followed in this case. It is not, therefore, possible to say that the Revenue suffered any prejudice. The order of remand passed....