2023 (5) TMI 1005

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....y the Ld. CIT(A) is bad in law, wrong on facts and against the principles of natural justice. 2. The Ld. CIT (A) has grossly erred in holding that provisions of Section 14A read with Rule 8D are applicable and failed to appreciate that total expenses of Rs.3,16,78,497/- debited to Profit & Loss Account for Year Ended 31.03.2013 which were disallowed in the computation of income as preoperative expenses to be capitalized to fixed assets and therefore no expenses claimed on taxable income and / or exempted income hence the question of disallowance of Rs.97,13,193/- u/s 14A does not arise at all. 3. That on the facts and in circumstances of the case Ld. CIT(A) has erred in directing to the Assessing Officer to verify the open....

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....(Rs.) (i) Expenditure directly relating to income which does not form part of total income   Nil (ii) Expenditure incurred by way of Interest (A*B/C)     (iii) One half % of average value of Investment income from which Does not form part of total income       Investment as on 01,04.2012 51000/-.     Investment as on 01.04.2013 3885226591/-     Average of investment 1942638795/-     One half % of average value of Investment subject to maximum Of expenditure (avg. X 0.5%) 97,13,193/-     Total disallowance as per Rule 8D   97,13,193/- This resulted in the impugned disall....

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....llowance under section 14A r.w. Rule 8D(iii) does not arise. 6. The Ld. AR pointed out that during the course of assessment proceedings, the assessee vide letter dated 19.03.2016 submitted before the Ld. AO that similar disallowance under section 14A made in AY 2011-12 was deleted by the Ld. CIT(A) vide his order dated 26.06.2014 as no business expenditure was claimed in the computation of income. The assessee placed on record working of disallowance under section 14A r.w. Rule 8D at page 37 of Paper Book as per which, disallowance, if at all, works out to Rs. 130/- only. Similar disallowance of Rs. 97,13,069/- made in AY 2012-13 has also been deleted by the predecessor Ld. CIT(A), copy of which is placed at pages 38 to 44 of the Paper B....