2019 (3) TMI 12

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.... Whether on the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income tax(Appeals) is justified in not considering the fact that the amount of disallowance u/s 14Ar.w. Rule 8D(2)(iii) to the amount of Rs. 38,86,138/- over and above the suo-moto disallowance of Rs. 82,71,741/- made by the Assessee was on the basis of CBDT Circular No.5 of 204 dated 11.02.2014 and provisions of Rule 8D? ii. Whether on the facts and in the circumstances of the case and in law the Ld. Commissioner of Income tax(Appeals) is justified in deleting the amount of disallowance u/s 14A r.w. Rule 8D(2)(iii) to the amount of Rs. 38,86,138/- over and above the suo-moto disallowance of Rs. 82,71,741/- made by the Assessee in view o....

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....(3)(1) [AO] wherein the income of the assessee was determined as Rs. 133.97 Crores under normal provisions after certain disallowances / adjustments as against returned income of Rs. 133.55 Crores e-filed by the assessee on 28/11/2014. The Book Profits u/s 115JB was determined at Rs. 318.29 Crores as against Rs. 317.90 Crores computed by the assessee. 2.2 During assessment proceedings, it transpired that the assessee earned exempt dividend income of Rs. 497.04 Lacs and offered suo-moto expense disallowance against the same u/r 8D(2)(iii) for Rs. 82.71 Lacs. The said disallowance was worked out by taking into consideration those investments which yielded exempt income during the year. The disallowance worked out by the Tax Auditor was ....

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....at whether these investments yielded any exempt income during impugned AY or not. We find that the disallowance worked out by the assessee is well in line with the decision of Delhi Tribunal (Special Bench) rendered in ACIT Vs. Vireet Investment (P.) Ltd. [82 Taxmann.com 415] wherein it has been held that only exempt income yielding investments were to be considered to arrive at the said disallowance. Therefore, the additional expense disallowance made under normal provisions, as made by Ld. AO, could not be sustained and the stand of first appellate authority, though on different reasoning, was to be confirmed. Accordingly, Ground Number- 1 stand dismissed. 4.2 So far as the plea of strategic investment as accepted by first appellate au....