2016 (1) TMI 611

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....e is to be decided in this appeal is that whether Ld. CIT(A) has erred in computing interest pertaining to tax free income as per Rule 8D(2)(ii) of the IT Rules 1962. 3. Briefly stated facts are that assessee is a Private Limited Company and having valid licence of Non Banking Finance Company (NBFC for short) from Reserve Bank of India and engaged in the business of share trading, investment, Financing and speculation business. During the year under consideration assessee has declared dividend income of Rs. 12,73,545/- out of said dividend income a sum of Rs. 12,44,545/- was represented out of shares lying in inventory and a sum of Rs. 29,000/- was represented from the share / mutual funds lying as investment in the books of account of ass....

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....nt ii) The amount of interest should be taken at an amount of Rs. 1,16,79,274/- after deducting Rs. 20,61,185/- and Rs. 53,62,859/- for the purposes of Rule 8D(2)(ii). iii) The disallowance is to be calculated by taking denominator of Rs. 37,02,71,649/- as total assets and not as Rs. 32,06,90,060/- of net assets. Now, being aggrieved by this order of Ld. CIT(A), Revenue is in appeal before us. Shri Girish Sharma, Ld. Authorized Representative appearing on behalf of assessee and Shri P.K. Chakraborty, Ld. Departmental Representative appearing on behalf of Revenue. 5. We have heard rival submissions of both the parties and perused the materials available on record. The Ld. DR relied on the order of Assessing Officer, on the other hand,....