2018 (7) TMI 2141

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....Adiko Holdings Pvt. Ltd. 2. The revenue, aggrieved by the order of Ld. Commissioner of Income-Tax (Appeals)-03 [CIT(A)], Mumbai, Appeal No.CIT(A)-3/ACIT- 2(1)(1)/IT-03/2016-17 dated 09/11/2016, has raised the following grounds of appeal :- 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the disallowance u/s.14A of the I.T. Act r.w.s. 8D made by the AO without appreciating that it was correctly worked out as per the method of calculation prescribed in Rule 8D of the Income Tax Rules, 1962." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the disallowance u/s.14A of the I.T. Act of the r.w.s. 8D made by the AO without appreciating ....

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....out aggregate disallowance of Rs. 374.14 Lacs which comprised-off of direct expense disallowance u/r 8D(2)(i) for Rs. 0.11 Lacs and indirect expense disallowance u/r 8D(2)(iii) for Rs. 374.03 Lacs. After adjusting suo-moto disallowance of Rs. 6.99, the net disallowance worked out was Rs. 367.15 Lacs which was added to the income of the assessee while arriving at income under normal provisions as well as u/s 115JB. 4. Aggrieved, the assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 09/11/2016 wherein it was, inter-alia, submitted that the net expenditure as claimed by the assessee was only Rs. 12.16 Lacs and therefore, the disallowance, if any, which has to be made is to be restricted to that amoun....

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....e appellant. In view of the same, the disallowance made by the appellant to the extent of Rs. 12,16,823/-, is confirmed as disallowed by the appellant on proportionate basis and the balance of Rs. 3,54,98,275/-, is deleted. In view of the same, Ground NO.2 is allowed. Aggrieved, the revenue is in further appeal before us. 5. We have heard the rival contentions and perused relevant material on record. The fact that the assessee claimed net expenditure of Rs. 12.16 Lacs during impugned AY remain undisputed. Against the same, the disallowance worked out by Ld. AO was Rs. 374.14 Lacs which was not, at all, justified. The Ld. CIT(A) has restricted the same to Rs. 12.16 Lacs, which is fair & logical. Upon perusal of Tribunal's order for AY 2008....