TaxTMI 
TaxTMI 
2019 (1) TMI 1796
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....a holding company of Religare Group of companies and their business is to provide support and strategic directions to its wholly owned subsidiaries, in the capacity of a holding company. For the Asstt. year 2009-10, they have filed their return of income on 30.9.2009 declaring a total taxable income of Rs. 16,58,03,380/- which subsequently was revised on 31.3.2011 by reducing it to Rs. 13,26,56,013/- which was comprising loss under the head "profits and gains of business and profession" to the extent of Rs. 1,62,43,912/-, income under the head "capital gains" of Rs. 61,981/- , underthe head "income from other sources Rs. 1,92,96,561/-. Assessment was complete u/s 143(3) by order dated 30.12.2011 at a total income of the assessee at Rs. 21,8....
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.... u/s 14A of the Act should have been computed only qua the investment which yielded exempt income during the relevant previous year and in any case, the disallowance u/s 14A cannot exceed the dividend income actually earned by the assessee. 5. We have gone through the record. In so far as the disallowance u/s 14A is concerned, during the year the assessee earned dividend income of Rs. 88,05,855/- and suo moto disallowed a sum of Rs. 23,14 crores in the return on this count i.e. Rs. 16,72,59,755/- on account of apportionment of income and expenditure and Rs. 6,41,70,755/- towards 0.5% average value of the investment of Rs. 12,83,41,15,527/-. Learned AO, however, computed the disallowance in terms of Rule 8D of the Rules and reached a figure....
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....ider only those investments which have actually yielded the tax exempt income during the relevant year and not the total investment. 8. On the aspect of the contention of the assessee that the disallowance should be restricted to some reasonable proportion of actual dividend received and such disallowance cannot in any case, exceed exempt dividend income at Rs. 87,05,855/- earned during the relevant year , this proposition is based on the decision of the Hon'ble jurisdictional High Court in the case of Joint Investments P. Ltd. vs CIT, 372 ITR 694 (Del). The ratio of the Hon'ble High Court holds the field and while respectfully following the same, we find that the disallowance shall not exceed the exempt income. We, therefore, set aside th....