TaxTMI 
TaxTMI 
2019 (4) TMI 1018
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Income-tax Act (the Act), as confirmed by Learned Commissioner of Income Tax (Appeals)-51 [CIT (A)], your appellant prefers an appeal on the following grounds, which it is prayed, may be considered without prejudice to one another: 1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of administrative expenses under section 14A r.w. r. 8D(2) ( i i i) and directing A.O to compute disallowance by considering the average value of investments disposed of f during the year, though the dividend received is Nil. 2. On the facts and circumstances of the case and in law, the CIT(A) er red in confirming interest u/s. 234B and 234C by the AO. 3. Your appel lant craves leave to add, alter, amend, delete or modify any of the above referred grounds of appeal." 2. Briefly stated, the assessee company which is engaged in the business of civil contractor & property developer had e-filed its return of income for A.Y. 2012-13 on 28.11.2012, declaring total income at Rs. 23,09,96,770/-. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the I.T Act. 3. During the course of the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id not find favour with the aforesaid contention of the assessee and declined to accept the same. Insofar the contention advanced by the assessee that no disallowance was called for in respect of the strategic investments made by it was concerned, it was observed by the CIT(A) that if an expenditure was incurred by the assessee on account of new acquisitions/disposals during the year, then appropriate disallowance under Sec.14A r.w. Rule 8D (2)(iii) was required to be made. In the backdrop of the aforesaid observations it was noticed by the CIT(A) that as the assessee during the year had disposed off some of its strategic investments, therefore, the same were required to be considered while computing the disallowance under Sec.14A r.w. Rule 8D(2)(iii). On the basis of his aforesaid deliberations the CIT(A) partly accepted the contentions advanced by the assessee insofar the quantification of the disallowance under Sec. 14A r.w Rule 8D (2)(iii) was concerned. 5. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short 'A.R') for the assessee at the very outset of the hearing of the appeal subm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt while concluding that the amount of the disallowance under Sec. 14A cannot exceed the amount of the exempt dividend income had observed as under:- "9. The position becomes clear and beyond doubt when w refer to the factual position in the appeal preferred by the Revenue against the decision of the Punjab and Haryana High Court in the case of Pr. CIT Vs. State Bank of Patiala [2017]. 391 ITR 218/245 Taxman 273/78 taxman.com 3 which as also decided with the decision in Maxopp Investment Ltd. (Supra). In State Bank of Patiala (Supra) the assessing Officer had applied Rule 8D of the Income Tax Rules 1962, but had restricted the disallowance to the amount claimed as exempt income. The Commissioner of Income-tax (Appeals) had enhanced and increased this disallowance as per Rule 8D of the Income Tax Rules, 1962. The said disallowance was more than exempt income. The Tribunal had reversed the finding of the Commissioner of Income-tax (Appeals) and restored the disallowance as made by the Assessing Officer i.e restricted the disallowance to the extent of exempt income. Decision in the case of State Bank of Patiala (supra) of the Punjab and Haryana High Court was affirmed by the Suprem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....end, delete or modify any of the above referred grounds of appeal." 10. Briefly stated, the assessee company had filed its return of income for A.Y. 2013-14 on 30.11.2013, declaring total income at Rs. 23,68,77,700/-. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the I.T Act. 11. During the course of the assessment proceedings the A.O declined to accept the explanation of the assessee that no disallowance under Sec.14A was liable to be made, and worked out the disallowance at Rs. 26,06,171/-. 12. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) concluded that as the assessee had received a dividend income of Rs. 1.78 crores during the year under consideration, therefore, he directed the A.O to identify the investments of the assessee on which such dividend income was earned and include the same for working out the disallowance under Sec.14A r.w. Rule 8D(2)(iii). 13. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorised Representative (for short 'A.R') for the assessee at the very outset of the hearing of the appeal submitted tha....