2023 (4) TMI 559

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....ing Officer to delete the disallowance of Rs.75 lacs made in the order of assessment on account of proportionate disallowance of interest in terms of Rule 8D(2)(ii) of Income-tax Rules inspite of recording the facts and also the decisions of this Hon'ble Tribunal in appeals for earlier years in case of the appellant. 2. That the CIT(A) also erred in not giving clear directions to the Assessing Officer that the disallowance in terms of Rule 8D(2) (iii) of Income-tax Rules on account of administrative expenses was to be restricted to Rs. 17,02,000/- being 0.5% of average investments of Rs.34.04 crores on which the appellant could receive the exempt income, instead of amount of Rs.24,26,8971- wrongly added by the appellant in the ....

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.... the same at Rs.75 lakh. The AO rejected the assessee's contention that the assessee has not sufficient own fund and in earlier year also, disallowance in this regard was disallowed. As regards disallowance with regard to Rule 8D(2)(iii), the AO accepted the assessee claim of Rs.24,26,897/-. 4. Upon assessee's appeal, the Ld. CIT(A) considered the issue as regard the disallowance Rule 8D(2)(iii). He gave part relief and he upheld the disallowance with regard to interest u/s 14A of the Act. 5. Against this order, the assessee is in appeal before us. 6. We have heard both the parties and perused the records. The ld. Counsel for the assessee contended that this issue is squarely covered in favour of the assessee by a series of order o....

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....fered by the assessee itself and delete the balance. Accordingly Ground no 4 of the appeal is allowed." 7. Per Contra, the Ld. DR did not dispute the above proposition that the issue stands covered in favour of the assessee. 8. Upon careful consideration, respectfully following the precedent in assessee's own case, we direct the AO to delete the disallowance with regard to interest u/s 14A as it is not disputed that assessee's own funds are many times more than exempt income. In this regard the assessee has filed addition ground that the disallowance with regard to section 14A cannot be imported in computation to book profit u/s 115JB of the Act. We find that this issue is also squarely covered in favour of the assessee by the decisio....