TaxTMI 
TaxTMI 
2021 (4) TMI 462
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....roceedings u/s.143(3) of the Income Tax Act, 1961 [in short, 'the Act']. Heard both the parties. Case file perused. 2. Coming to the A.Y 2010-11 involving ITA No.1080/Hyd/2019, we find that the Revenue solitary substantive grievance challenging correctness of the CIT (A)'s action restricting the Assessing Officer's action making section 14A r.w. Rule 8D disallowance of Rs. 3,13,31,370/- involving alleged direct and administrative expenses of Rs. 2,81,01,260 and 32,30,110/- respectively only to the extent of the corresponding investments yielding the exempt income. The CIT (A)'s detailed discussion to this effect reads as under: "6.2 During the course of appeal proceedings, with regard to the above ground, the appellant submit....
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....2014, wherein the Hon'ble ITAT held that only investments which yielded exempt income is considered for the disallowance u/s.14A. Appellant already disallowed Rs. 11,09,716/- u/s.14A in its computation of income. Therefore, the Assessing Officer is directed to consider the disallowance u/s.14A made by the appellant and recalculate the same by keeping in view of the above caselaws". 3. We have heard rival argument against and in support of the CIT (A)'s impugned directions. We notice that he has followed the tribunal's order in assessee's case itself for A.Y 2013- 14 (Supra) that only exempt income yielding investments deserve to be considered for the purpose of Rule 8D disallowance computation. The Revenue is equally fair in....
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....he appellant in its return of income. The issue before me is whether the disallowance should be made only in the case where dividend is received or should be made on the total investment. It is pertinent to refer to the following case laws which deals with the same issue: a) Hyderabad Tribunal's order in the case of Srinivasa Cystine Pvt Ltd Vs. ITO, in ITA No.1846/Hyd/2014 dated 18.01.2017, wherein the decision was held as "it is only the investments which yield tax free income that has to be considered for applying the formula prescribed under rule 80(2)(iii). Similar view was also taken by this Bench in other cases also. Considering this view, we direct the AO to consider only the investments, which yielded the exem....
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....3 ('the Tribunal Rules') We refer to the subject appeal filed by the Deputy CIT, Circle 1(2), Hyderabad ('Department') (ITA No. 2116/Hyd/2018 before 'A' Bench) against the order August 07, 2018 passed by the Learned Commissioner of Income-tax (Appeals) -1 ('CIT(A)'), in respect of the captioned year. 1. Background During the captioned year, the Company earned exempt income in the nature of dividend of Rs. 10,91,280/-. During the time of filing of return of income, the Company suo-moto made disallowance of Rs. 23,23,699/- as per the provisions of section 14A read with Rule 8D of the Income-tax Rules, 1962 ('IT Rules'). In this regard, the learned assessing officer (' AO&#....
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....elhi High Court lI2019j 101 taxmann.com 167j was dismissed which held that the 14A disallowance cannot exceed the exempt income. 2. Hon'ble Supreme Court, in the case of Principal Commissioner of Income-tax v. State Bank of Patiala lI2018j 99 taxmann.com 286 (SC)], wherein the SLP filed by the tax authorities against the judgement of the Hon'ble Delhi High Court lI2018j 99 taxmann.com 285 (Haryana)] was dismissed which held that the 14A disallowance cannot exceed the exempt Income. 3. Hon'ble Bombay High Court, in the case of Principal Commissioner of Income-tax-3 vs. Reliance Ports and Terminals Ltd.lI2020j 114 taxmann.com 529 [Bombay] 4. Hon'ble Jurisdictional Tribunal in the case of Mylan Labora....
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.... * Dy CIT v Hind Industries Ltd - 14 DTR 561 (Delhi Tribunal) * CIT v Gilbert and Barker Manufacturing Co, USA - 111 ITR 529 (Mum) * CIT v Mahalakshmi Textile Mills Ltd - 66 ITR 710 (SC) Iv * CIT v Nelliappan (S) - 66 ITR 722 (SC) (\ * ACIT v M/s Bank Of Tokyo-Mitsubishi UJF Ltd. (2009- TIOL-51-ITAT-DEL) / 5. In view of the above, we request your Honors to kindly consider our application under Rule 27 of the Rules, on the additional issues, while disposing of the Department's appeal". 6. We have given our thoughtful consideration to rival pleadings in Revenue's main appeal as well as assessee's Rule 27m petition. We find no merit in Revenue's stand since the CIT (A)'s has directed t....