2018 (8) TMI 131

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....IT Rules, 1962 without appreciating the decision of the Hon'ble Jurisdictional High Court in the case of Dhanuka & Sons Vs. CIT reported in (2011) 339 ITR 319 (Cal) in the facts and circumstances of the case. 3. During the assessment proceedings the AO found that the assessee invested large fund in securities, income on which is not chargeable to tax. On perusal of accounts of assessee the AO found that the assessee has earned dividend of Rs. 2, 39, 34, 566/- and interest on PPF of Rs. 7, 46, 233/- and LTCG on sale of shares of Rs. 8, 48, 41, 144/-. The average investment of assessee during the year under consideration of Rs. 54, 62, 03, 080/-. The AO found that the assessee herself offered a disallowance of Rs. 27, 31, 015/- u/s. 14A of t....

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.... the investments made and as such deleted the addition made by the AO on this issue. We find that the assessee on her own disallowed 25 lakhs in the return of income and no disallowance under Rule 8D(2)(iii) is not necessary and as such deleted the same. We find that identical issue on identical/similar facts in assessee's own case for the A. Y 2011-12 he Tribunal discussed the matter as under:- "7. Now coming to disallowance made by the AO under Rule 8D(2)(iii) of l. T Rules, 1962. At the outside, it was observed that assessee has sum motu made the disallowance of Rs. 15 lacs against the exempted income earned by it during the year. However, the AO has invoked the provision of Rule 8D(2)(iii) without recording the satisfaction as envisag....

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....t is allowed. " We respectfully following the consistent view of the Tribunal decline to interfere in the order passed by the Ld. CIT on this account. Accordingly, the ground taken by the Revenue is partly allowed for statistical purposes. " 8. Regarding the addition under Rule 8D(2), the Tribunal vide the same order on identical issue remanded the matter to the file of AO with a direction to verify the source of investment in the light of decision of the Hon'ble Jurisdictional High Court in the case of Dhanuka & Sons supra. Relevant portion of such decision/order is reproduced herein below:- "6. We have heard the rival contentions of both the parties and" perused the material available on record. In the instant case the addition has....

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....ven for instance/five or ten years ago/ it is for the assessee to show by the production of documentary evidence that such loaned amount had already been paid back and for the relevant assessment year; no interest is payable by the assessee for acquiring those old shares. In the absence of any such materials placed by the assessee/ in our opinion/ the authorities below rightly held that proportionate amount should be disallowed having regard to the total income and the income from the exempt source. In the absence of any material disclosing the source of acquisition of shares which is within the special knowledge of the assessee, the assessing authority took a most reasonable approach in assessment. There is no presumption- provided in the ....