2022 (12) TMI 1467

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....1 ('the Act'), pertaining to the Assessment Year ('A.Y.' for short) 2017-18. 2. There is a delay of 553 days in filing the appeal and the cross objection delay is 53 days. After hearing both the sides on the ground that there was sufficient cause for the delay, we hereby condone the delay in filing the said appeal and the cross objection. 3. The grounds of appeal raised by the Revenue are as under: 1. "Whether, on the facts and in the circumstances of the case and in law, Ld. CIT(A) was justified in allowing the appeal of the assessee without appreciating the fact that a clarification has been inserted in section 14A which clearly says that the provisions of this section shall apply and shall be deemed to have always appl....

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....ssee then challenged the assessment order by an appeal before the ld. CIT(A), who partly allowed the appeal of the assessee. 6. The Revenue is in appeal before us, challenging the order of the ld. CIT(A) in allowing the appeal of the assessee. 7. It is observed that the assessee has earned exempt income, amounting to Rs.25,89,959/- from sale of listed equity shares and the assessee has claimed exempt u/s. 10(38) of the Act for the same. Further, the assessee has not earned dividend income for the year under consideration and the assessee has suo moto disallowed the expenditure incurred to earn the exempt income, amounting to Rs.1,263/-, which the A.O. specifies it to be only with respect to demat charges and no further disallowance wa....

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....vision of Rule 8D(2) by relying on the decision of FLSmidh (P.) Ltd. vs. CIT, Corporate Circle-2(1), Chennai [2020] 118 taxmann.com 272 (Madras). The ld. CIT(A) has considered the alternate claim of the assessee that the disallowance u/s. 14A read with Rule 8D(2)(iii) is to be calculated only on the investments on which exempt income was received by the assessee by placing reliance on the Special Bench decision in the case of ACIT vs. Vireet Investments Pvt. Ltd. 82 taxmann.com 415 (Del). The ld. CIT(A) by considering the catena of judgments held that only investment from which exempt income is received, has to be considered for calculation of disallowance u/s.14A read with Rule 8D(2)(iii) of the Act and directed the A.O. to recompute the d....

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....Ltd. vs. CIT [2018] 91 taxmann.com 154 (SC), which held that Rule 8D is prospective in nature and it is not applicable to assessment year prior to 2007. The assessee relied on the decision of the Maxopp Investment Ltd. (supra). 11. Having heard the rival submissions and perused the materials available on record. It is observed that the assessee has made a suo moto disallowance of Rs.1,263/- for which the assessee contends that the A.O. ought not to have applied Rule 8D on the ground that suo moto disallowance has been made by the assessee. The assessee further contends that without prejudice, the disallowance should be restricted only to the investments which have yielded an exempt income for the assessee during the impugned year. It is ....