TaxTMI 
TaxTMI 
2023 (3) TMI 1228
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....rd are as under :- 3. The assessee is a company stated to be engaged in the business of investment, selling underwriting, shares etc. The assessee electronically filed its return of income for A.Y 2013-14 on 28.11.2013 declaring NIL taxable income. The case of the assessee was selected for scrutiny and thereafter assessment was framed u/s. 143(3) vide order dated 29.03.2016, and the total was determined at Rs. 83,88,530/-. 4. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 20.11.2017, granted partial relief to the assessee. 5. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds:- 1. That the order passed by Assessing Officer ('AO&....
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....majority of the dividend income earned by the assessee is from the strategic investments made in the group concerns and hence no disallowance is justified w/s 14A. 7. Without prejudice, the AO and CIT(A) have erred in not appreciating the fact that the assessee has earned exempt income from only four concerns and hence taking the entire investments for calculations w/s 14A and Rule 8D is completely illegal and unjustified. 8. That, in view of the facts and circumstances of the case, the AO/CIT(A) has erred on facts and in law in not appreciating the evidence filed by the assessee in a judicious manner. 9. That the additions/disallowances made are based on mechanical application of rule 8D. The additions/disallowan....
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....,90,79,877/- and after giving the credit of the suo motto disallowance of Rs. 3,35,91,350/- that was made by assessee made addition of net amount of Rs. 83,88,527/- u/s. 14A r.w.r 8D. 8. Aggrieved by the order of AO, assessee carried the matter before CIT(A), who upheld the order of AO. 9. Aggrieved by the order of CIT(A), assessee is now before Tribunal. 10. Before us, Ld. AR reiterated the submissions made before the lower authorities and further submitted that AO, while working out the disallowance under Rule 8D has considered the total investments irrespective of the fact whether the assessee has earned any exempt income from those investments. He submitted that the various High Courts including the jurisdictional High Court ha....
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....t been controverted by the Revenue. We find that Hon'ble Delhi High Court in the case of Cargo Motors (P) Ltd. vs DCIT (supra) after considering various decisions cited in the order, have held that for the purpose of making disallowance of expenses u/s. 14A r.w.r. 8D only those investments are to be considered for computing average value of investments which have yielded exempt income during the relevant year. Before us, Revenue has not placed on record any contrary binding decision. We further find that there is no finding of the lower authorities on the investments which have yielded exempt income. We are therefore of the view that the issue of the disallowance u/s. 14A needs to be reworked by the AO, in view of the decision of Hon'ble De....