2018 (4) TMI 933

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he assessment order dated 31.12.2013 passed by learned Assessing Officer (hereinafter called "the AO") u/s 143(3) of the Income-tax Act, 1961 (hereinafter called "the Act"). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under- "1. Under the facts and in Law, the Learned CIT (A) has erred in confirming disallowance of Rs. 49,18,775/-under section 14A r.w.r. 8D of the Income Tax Act, 1961. 1.01 The Learned C1T(A) failed to appreciate the fact that the appellant is having Investment in Subsidiary Companies and the same should not be considered for computing disallowance u/s I4A as such Investments are strategic in natu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....3.83 crores, while investment in Mutual Fund were to the tune of Rs. 72.64 crores and other investments were to the tune of Rs. 10,000/-. The AO invoked provision of Section 14A of the 1961 Act and applied Rule 8D of Income-tax Rules, 1962 and made following disallowances of the expenditure incurred in relation to the income which does not form part of the total income:-   Amount (Rs.) Amount of expenses directly related to such income NIL Amount of the interest expenses indirectly attributable to such income, in accordance with the formula AxB/C, where A. Total interest expenditure minus direct interest expenditure on such income. 472,024/- (A) Average of such investment on the first and last day of previous year = 983,755,01....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y as four sub grounds to ground no. 1 raised in memo of appeal filed with the tribunal. At the outset Ld. Senior Counsel for the assessee submitted that the ground no. 1.01 which is concerning the claim and contentions of the assessee that strategic investment made by the assessee to the tune of Rs. 13.83 crore in subsidiary companies need to be excluded , is to be decided against the assessee in view of the recent decision of Hon‟ble Supreme Court dated 12- 02-2018 in the case of Maxopp Investment Limited v. CIT reported in (2018) 91 taxmann.com 154(SC) which decided the issue against the assessee and in favour of Revenue. The Ld DR also submitted that this issue is to be decided against the assessee because of the decision of Hon&#....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....me of issue of said growth fund by IDFC in which assessee has invested Rs. 72.64 crores. It was contended that the said growth funds are to be excluded while computing disallowance of expenditure u/s 14A. The learned Senior counsel for the assessee had also relied upon three decisions of Hon‟ble tribunal , as under:- 1. 167 TTJ 204 (Mum-Trib) Everest Kanto Cylinder Ltd v Asst. CIT 2. 43 CCH 348 (Mum-Trib) Manugraph India Ltd v DCIT 3. ITA No. 155/Mum/2014- Mumbai Tribunal in Savita Oil Technologies Ltd v DCIT The Ld. DR relied upon the appellate order of the CIT-A. 6. We have considered rival contentions and perused the material on record. The controversy before us is now restricted to the consideration of investment in gro....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... UTI fixed maturity plan before us, according to which it is a growth oriented fund and not eligible for dividend. If we exclude the amount invested by the assessee in the growth plan, disallowance under Rule 8D @0.5% works out to be Rs. 1.39 lakhs. However, copy of scheme of UTI Fixed Maturity Plan was first time filed before Tribunal as an additional evidence along with application for admission of additional evidence dated 27-2-2014. We accept the additional evidence and matter is restored back to the file of AO for deciding afresh the quantum of disallowance keeping in view our above observations." Thus , under these circumstances it is critical and important for the AO to go through the scheme of issue of IDFC Cash fund - Super Inst ....