2018 (2) TMI 2090

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....owance u/s. 14A r.w. Rule 8D of the Act. 3. Briefly stated the facts are that, the Assessing Officer while completing the assessment worked out the disallowance u/s. 14A r.w. Rule 8D2(ii) at Rs..9,92,591/- and under Rule 8D2(iii) at Rs..2,12,627/-. The working of the Assessing Officer towards disallowance u/s.14A r.w. Rule 8D was sustained by the Ld.CIT(A) by following his predecessor's order for the Assessment Year 2008-09. 4. Ld. Counsel for the assessee before us contends that the total investments made by the assessee during the current Assessment Year are only to the extent of Rs..1039.86 Lakhs and whereas Capital and Reserves of the assessee stood at Rs..2818.77 Lakhs. He further submitted that the Coordinate Bench in assessee's....

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....est free funds available with it, no disallowance needs to be made under Rule 8D2(ii). In the circumstances, we remit this issue to the file of the Assessing Officer who shall examine the contentions of the assessee that the interest free funds are much more than the investments. If the submissions of the assessee are found to be correct, no disallowance under Rule 8D2(ii) is required in view of the decisions of the Hon'ble Jurisdictional High Court in the cases of CIT v. HDFC Bank Ltd and CIT v. Reliance Utilities Power Limited (supra). Similarly, the Special Bench in the case of ACIT v. Vireet Investments Private Limited held that only those investments which yielded dividend income should be considered for disallowance under Rule 8D2....

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....er for examining the contentions of the assessee and the consequential orders were passed accepting that the assessee has its own funds much more than the investments and no interest was disallowed u/s. 36(1)(iii) and also no proportionate interest expenses were disallowed towards and the advances to partnership firm. 8. Ld.DR has no objection in following the order of the Coordinate Bench in assessee's own case for the earlier year Assessment Years. 9. On hearing both the parties, we find that the issue in appeal has been set-aside by the Coordinate Bench in assessee's own case for the Assessment Years 2008-09, 2009-10 and 2010-11 and consequential orders were also passed accepting the contentions of the assessee. Respectfully follow....