TaxTMI 
TaxTMI 
2018 (8) TMI 1364
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....l: ITA No. 3108/Del/2011(Assessment Year 2008-09) "1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of Rs. 20,60,17,469/- made u/s 14A read with rule_8D by wrongly following direct nexus method in accordance with clause (i) of Sub rule (2) of rule 8D for the purpose of computation of disallowance of interest under section 14A. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing to reduce the interest cost of Rs. 55.69 crores, by holding it directly attributable to earning "Interest Income", in the computation of disallowance made u/s 14A read with clause (ii) of sub rule (2) of Rule 8D. 3. The ap....
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....and securities. During the course of assessment proceedings for years under consideration, it was observed that assessee had investment income, from which income was claimed to be exempt under section 10 (34) of the Income Tax Act, 1961 (the Act). Ld.AO observed that assessee had made suo-moto disallowance under section 14 A of the Act. Ld. AO issued show cause notice calling upon assessee to explain disallowance computed by assessee under section 14 A of the Act. 2.1. Dissatisfied with explanation provided by assessee, Ld.AO recomputed disallowance under section 14 A, and worked out addition in the hands of assessee being difference between disallowance computed by assessee and Ld.AO. 2.2. Aggrieved by reworking of disallowance under....
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....- for Assessment Year 2009-10. 5. During the course of arguments, Ld.Counsel raised a defensive plea that disallowance, as per law, cannot exceed the amount of exempt income earned by assessee, considering decision passed by Hon'ble Delhi High Court in case of Joint Investments Pvt. Ltd vs. CIT reported in (2015) 59 Taxmann.com 295 wherein Hon'ble court has observed that; "The third, and in the opinion of this Court, important anomaly which we cannot be unmindful is that whereas the entire tax exempt income is Rs. 48,90,000, the disallowance ultimately directed works out to nearly 110 per cent of that sum, i.e., Rs. 52,56,197. By no stretch of imagination can s. 14A or r. 8D be interpreted so as to mean that the entire tax exemp....
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....y High Court in case of B.R Bamsi vs. CIT reported in 83 ITR 223, wherein a similar situation arose before Hon'ble Court. 8. We have perused the submissions advanced by both sides in the light of records placed before us. 9. The issue that needs adjudication is an interesting one. This is a case where assessee missed the bus to file a cross objection or a cross appeal. The situation is a peculiar one, where assessee cannot raise a belated plea under Rule 29 of ITAT Rules. This is why Ld.Counsel defensive plea before this Tribunal, of maintaining status quo of no further addition in the light of decisions passed by Hon'ble Bombay High Court in case of B.R.Bamsi vs.CIT (supra). 9.1. On perusal of decision of Hon'ble Bombay High Court....
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.... 33 of the Income-tax Act along with the relevant Rules and that of an appeal under the Code of Civil Procedure and the provisions of Order XLI, rule 22. The judgment holds that when the department files an appeal for an increase in the assessed income, the subjectmatter of the appeal is the increase claimed by the department and the assessee can urge any ground of defence even though it might have been rejected by the Appellate Assistant Commissioner for showing that there should be no increase. It has further held that that the assessee is not liable to be assessed at all is a ground for showing that there should be no further assessment and the department's appeal can therefore be resisted on that ground and that there is no incongru....