2019 (4) TMI 1731

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....y. Commissioner of Income Tax, Circle 14(3)(2), Mumbai (in short 'DCIT/ ITO / AO') for the A.Y. 2013-14 vide order dated 26.02.2016 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in these cross appeals is against the order of CIT(A) in restricting the disallowance of expenses relatable to exempt income under the provisions of section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 (hereinafter the 'Rules') as computed by the assessee suo moto . For the deletion of disallowance Revenue has raised the following ground No. 1: - "1. Whether in the facts and circumstances of the case Ld. CIT(A) was justified din relying on the precedents cited which were distinguishable in a....

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....to disallowed by assessee by observing in para 6.30 as under:- "6.3 I have considered the facts of the case and the appellant's submissions Perusal of the appellant's P & L account shows that the appellant had earned dividend income of Rs. 5,000/- only. This dividend income was earned  from investment in co-operative ban which is taxable and is not exempt. It is seen that this dividend income has also been shown as income from other sources and has been offered to tax in the computation of income and has not been claimed as exempt. No exempt income was earned during the year under consideration. I also find that the appellant's own interest free funds were in excesr5fl e investments made. I find that the various Courts hav....

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.... suo moto disallowance made by the appellant is deleted. The appellant's ground of appeal is allowed." Aggrieved, now Revenue and assessee both are in cross appeals before Tribunal. 4. We have heard rival contentions and gone through the facts and circumstances of the case. We find that the revenue is in appeal against deletion of disallowance of expenses relatable to exempt income under rule 8D(2)(ii) & 8D(2)(iii) assessee is in cross objection against sustenance suo moto disallowance made by CIT(A) at Rs. 7,50,000/-. The learned Counsel for the assessee stated that the fact is that the assessee has earned dividend income of Rs. 7500/- from investment in Abhyudaya  Co-operative Bank which is taxable under the head of income ....

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....ate bench in the case of Shri Chandrashekhar Bahirwani (supra). Consistent with the view taken in the above said decisions rendered by the co-ordinate benches, we reject the contentions of the Ld D.R. Accordingly we direct the assessing officer to exclude the disallowance voluntarily made by the assessee also u/s 14A of the Act." 5. Even, otherwise this issue is covered by the decision of Hon'ble Bombay High Court, Nagpur Bench in the case of Pr. CIT vs. Ballarpur Industries Limited in Income Tax Appeal No. 51 of 2016, wherein this issue has been considered and finally following the judgment of Hon'ble Delhi High Court in the case of Cheminvest Limited vs. CIT (2015) 378 ITR 33 (Delhi) held as under: - "On hearing the learned Co....