TaxTMI 
TaxTMI 
2020 (6) TMI 780
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....order dated 11.2.2020 passed by Ld. CIT(A)-11, Bengaluru. The grounds of appeal urged by the assessee read as under: 1. The learned CIT(A) has erred in passing the order in the manner which she did. 2. The learned CIT(A) is wrong in law by confirming the additions of the Assessing Officer and passing the order without considering the submissions of the appellant. 3. The learned CIT(A) is wrong in law in confirming the addition made by the Assessing Officer u/s 14A r.w. Rule 8D of the Act. 4. The learned CIT(A) has erred in not recording the satisfaction before proceeding to invoke the provisions of s.14A r.w. Rule 8D of the Act. 5. The learned CIT(A) ought to have appreciated that no expenditure is incurred to invoke S.14A si....
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....cur any expense during the year for earning exempt income; that most of the investments have been brought forward from earlier year; that the investments in equity and preference shares have been made out of own funds and that the investments made in associate and subsidiary companies are strategic investments in the nature of equity and preference shares. The assessee also contended that, according its own workings, the disallowance u/s 14A of the Act works out to Rs. 7,54,468/- only. 3. The A.O. did not accept the contentions of the assessee However, he computed the disallowance at Rs. 19.95 crores; which consisted of interest disallowance of Rs. 18.65 crores under rule 8D(2)(ii) and disallowance of Rs. 1.28 crores out of administrativ....
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....ecording of dissatisfaction. As rightly pointed out that the Ld CIT(A), we notice that the AO has issued show cause notice to the assessee on due examination of financial statements of the assessee, since the assessee did not make any disallowance u/s 14A of the Act, even though it had earned exempt income. Hence the dissatisfaction of the AO has been demonstrated in the assessment order and it is not a case of mechanical invoking of provisions of Rule 8D. Accordingly we reject ground no.4 of the assessee. 7. In ground no.6, the assessee is contending that the assessee has got sufficient own funds and hence disallowance u/s 14A is not warranted. Before us, the Ld. A.R. submitted that the own funds available with the assessee is in excess....
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....rtnership firm. We notice that the very same issue was considered by Ahmedabad Special bench of ITAT in the case of Shri Vishnu Anand Mahajan (ITA No.3002/Ahd/2009 dated 25-05-2012) and identical contentions made by the assessee were rejected by holding that, once the share income is excluded from the total income u/s 10(2A) of the Act, the provisions of section 14A of the Act would apply to it. Hence, this contention of the assessee would fail. 9. The next contention urged by the assessee is a partner in many firms. Some firms have earned profit and other firms have incurred loss. She submitted that the A.O. has considered only "share of profit received from partnership firm" for the purposes of sec.14A and did not consider "share of lo....
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....of this proposition, the Ld. A.R. placed reliance on the decision rendered by Hon'ble High Court of Delhi in the case of Joint Investment Private Limited Vs. CIT 372 ITR 694 and also the decision rendered by Mumbai bench of Tribunal in the case of Future Corporate Resources Limited Vs. DCIT (ITA No.4658/Mum/2015 dated 26.7.2017). 11. The Hon'ble Delhi High Court has considered an identical issue in the case of PCIT vs. Caraf Builders & Construction (P) Ltd (2019)(101 taxmann.com 167) and has held as under:- "25. Total exempt income earned by the respondent-assessee in this year was Rs. 19 lakhs. In these circumstances, we are not required to consider the case of the Revenue that the disallowance should be enhanced from Rs. 75.89 crore....