2019 (8) TMI 1946

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....2(1), Mumbai (in short DCIT/ITO/ AO) for the A.Y. 2010-11 vide order dated 26.02.2013 under section 143(3) of the Income-tax Act, 1961 (hereinafter 'the Act'). 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the disallowance of expenses relatable to exempt income made by AO by invoking the provisions of section 14A of the Act read with Rule 8D of the Rules. For this assessee has raised the following ground No. 1: - "1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of INR 8,37,28,783 made by the Assessing Officer under section 14A of the Income Tax Act as against the disallowance of INR 8,14,83,241 worked out and submit....

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....see preferred the appeal before CIT(A). The CIT(A) noted the submissions of the assessee and confirmed the action of the AO by noting that from the argument of the assessee that there is concept of total asset and hence there should not be any net asset but did not convince because it is evident from the balance sheet that the assessee has utilized substantial interest bearing funds for fixed assets, which give rise to earning of dividend and as such assessee has incurred the expenditure for earning dividend. According to CIT(A), the interest element to the extent of Rs. 7,56,10,516/- which is related to the investment and therefore, the AO has rightly calculated the disallowance because this interest expenditure relates to investment capab....

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.... Counsel for the assessee stated that the assessee has filed revised computation of disallowance under section 14A read with Rule 8D of the Rules, which is enclosed at page 33, wherein disallowance made amounting to Rs. 8,28,13,345/-. The learned Counsel for the assessee stated that the working given by assessee was not considered by the CIT(A) hence, the revised the computation, wherein the assessee has excluded the investment which is not received any exempt income during the year of appeal, is to be excluded. 6. When these facts were confronted to the learned Sr. Departmental Representative, he stated that the matter can be restored back to the file of the AO for re-computation of disallowance. 7. After hearing both the sides and g....