2018 (12) TMI 2021

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....1 (hereinafter referred to as 'the Act'), dated 28.04.2014 2. The grievances raised by the Revenue are as follows: "i. That on the fact and in restricting the disallowance u/s 14A to Rs.5,10,242/- by observing that such disallowance u/s 14A should be in respect only of that part of investment which gives rise to exempt income during the year, whereas circular No. 5/2014 dated 11.02.2014 has amply clarified that for invoking disallowance u/s 14A, it is not material that assessee should have earned such income during the financial year under consideration. ii. That on the fact and in deleting the addition of sum of Rs. 95,77,250/- being the amount of disallowance made u/s 14A to the Book Profit determined u/s 115JB, where as explanation ....

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.... stand so taken by the Assessing Officer the assessee carried the matter in appeal before the ld. CIT(A) who has deleted the addition made by the Assessing Officer. Aggrieved, the Revenue is in appeal before us. The Id Counsel for the assessee relied on the stand taken by the Id CIT(A). On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 5. We have given a careful consideration to the rival submissions and perused the material available on record, we note that main grievance of the Revenue is against deletion of disallowance of Rs.95,77,250/-, which was made by the AO under rule 8D(....

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.... 8D(iii) = (0.5% of Avg. Investment) - (0.5% of Rs.102,048,430) = Rs.5,10,242/- We note that the calculation u/r 8D(2)(iii) r.w.s. 14A, for the investments made by the assessee come to Rs.5,10,242/- which has been verified by the Id CIT(A), who has co-terminus power as that of assessing officer. Accordingly, addition on this ground is restricted to Rs.5,10,242/- and the balance addition of Rs.90,67,008/-(Rs.95,77,250- Rs.5,10,242) is directed to be deleted. We do not find any infirmity in the order of Id CIT(A), his order on this issue is hereby upheld and ground raised by the Revenue is dismissed. 6. We note that ground no.2 raised by the Revenue is directed against adding a sum of Rs.95,77,250/-, being the amount of disallowance made u/....