TaxTMI 
TaxTMI 
2019 (6) TMI 400
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..../Mum/2018, AY 2012-13 2.1 This appeal contests the order of Ld. Commissioner of Income-Tax (Appeals)-48, Mumbai [CIT(A)], Appeal No. CIT(A)-48/I.T.-63/DCCC- 2(4)/2015-16 dated 21/02/2018 on following grounds of appeal: - (1)(a) On the facts and circumstances of the case and in law the Ld. CIT Appeals has erred in confirming the disallowance of Rs. 40,55,723/- u/s 14A r.w.r. 8D and adding it to the total income of the appellant. (b) The Ld. CIT Appeals failed to appreciate the fact that the appellant had received dividend from investments made in subsidiary companies, which were for the purpose of business. (c) The Ld. CIT Appeals failed to consider that the appellant is a Real Estate Company & all expenses clai....
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....Loss Account of the company to arrive at the Book Profit u/s.115JB of the Income Tax Act, 1961. (d) Ld. CIT Appeals failed to consider Special Bench decision which has decided the issue in favour of the appellant." As evident from grounds of appeal, the sole issue involved in the appeal is quantum of disallowance u/s 14A and adjustment thereof while computing Book Profits u/s 115JB. 2.2 Facts in brief are that the assessee being resident corporate entity stated to be engaged in Real Estate Development was assessed for impugned AY on 05/03/2015 in scrutiny assessment u/s 143(3) by Ld. Deputy Commissioner of Income Tax Officer-Central Circle 2(4), Mumbai [AO]. The income under normal provision was determined at Rs. 235.84 Lacs ....
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.... (b) The Ld. ClT Appeals ought to have appreciated the fact that, the appellant has made no new investments during the year. On the other hand, there has been reduction in investments held by the appellant during the year. (c) The Ld. CIT Appeals failed to appreciate the fact that the appellant had received dividend on investments made in subsidiary companies, which were for the purpose of business. (d) The Ld. CIT Appeals failed to consider that the appellant is a Real Estate Company & all expenses claimed in its accounts were incurred for the purpose of business & thus no part of it can be disallowed under Rule 8D(iii). 2.(a) Without prejudice to the above ground even if disallowance is made u/s 14A r.w.r.....
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....e of Rs. 476.97 Lacs was reduced from Work-in-Progress Account. Upon further appeal, Ld. first appellate authority deleted interest disallowance in view of the fact that the assessee's own funds were more than the investments. However, expense disallowance of Rs. 46 Lacs was confirmed and Ld. AO was directed to consider the same separately for taxation purposes. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Authorized Representative for Assessee [AR], Shri Parkash Jotwani, drawing our attention to the financials of the assessee, submitted that majority of the expenditure incurred by the assessee during impugned AY was directed towards construction activities only and therefore, impugned additions were not warranted. ....
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.... 5.3 Proceeding further, we find that Hon'ble Supreme Court in recent judgment titled as Maxopp Investment Ltd. Vs CIT [12/02/2018 91 Taxmann.com 154] has laid down certain vital propositions concerning disallowance u/s 14A. In the said decision, the Hon'ble court, has, interalia, approved the applicability of disallowance u/s 14A to investments irrespective of motive to make such investments. Therefore, the said decision would have certain bearing on the issue under hand. We find that the quantum assessment orders for both the years have been framed prior to the aforesaid decision and both the parties did not have the benefit of the same. 5.4 Keeping in view the entirety of facts and circumstances, we deem it fit to set-aside the findi....