2019 (3) TMI 1745

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....see is with regard to action of the Ld. CIT(A) in confirming the disallowance u/s.14A of the Act read with Rule 8D(2)(iii) of the rules under normal provisions of the Act. The ground No.5 raised by the assessee is with regard to the action of the Ld. CIT(A) in confirming the disallowance u/s.14A of the Act while computing book profits u/s.115JB of the Act. 3. The brief facts of this issue are that the assessee is a public limited company engaged in the business of manufacturing cattle feeds, poultry feeds, agri inputs, oil palm plantations and live birds and had filed its return of income for the A.Y. 2012-13 on 30/11/2012 declaring total income of Rs. 84,99,66,509/-. Thereafter, the assessee filed revised return of income on 29/03/2014 ....

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....owance u/s.14A of the Act as the dividend received from such company, if any, would not be exempt in the hands of the assessee company. The assessee also pleaded that investments made in certain companies for consideration other than cash should also be excluded while computing the disallowance u/s.14A of the Act. The assessee filed detailed break-up of the aforesaid contentions before the Ld. AO. The Ld. AO recorded satisfaction that the disallowance made by the assessee is incorrect and accordingly, proceeded to compute the disallowance in the computation mechanism provided in Rule 8D(2) of the rules and made the following disallowance:- a. Under Rule 8D(2)(ii)  Rs. 1,67,29,510/- b. Under Rule 8D(2)(iii) Rs. 55,23,233/- ....

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....s much as the investments made in foreign companies should be excluded ; the disallowance voluntarily made by the assessee should be excluded while computing the final disallowance u/s.14A of the Act ; and disallowance under third limb of rule 8D of the rules should be restricted to only those investments which had actually fetched dividend income by the assessee during the year. We find that the issue of investments made in the category of strategic investment have already been held against the assessee by the recent decision of Hon'ble Supreme Court in the case of Maxopp Investments Ltd., vs CIT reported in 402 ITR 640 (SC). 6.1. In view of the aforesaid facts, we direct the Ld. AO to consider only those investments which had actually ....