2025 (2) TMI 1886

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....rt "AY") 2010-11. 2. The sole issue that has been raised by the revenue is against action of the Ld.CIT(A) deleting addition/disallowance made u/s.14A read with Rule 8D of the Income Tax Rules, 1962 (hereinafter in short 'Rules'). 3. Brief facts are that assessee is a company, which filed its return of income (RoI) for AY 2010-11 on 22.09.2010 admitting total income of Rs. 54,41,85,120/-, which has been selected for scrutiny and assessment was completed by AO u/s.143(3) of the Act on 01.02.2013, by making an addition of Rs. 6,11,31,937/-. In the said addition, the AO has made addition of Rs. 25,30,769/- on account of disallowance u/s 14A of the Act which relates to subject matter of the present appeal before us as discussed (infra). I....

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....t be applicable because there would be no cost attributable for making investment in ones own concern. Further we find that the Ld. AO has not made a finding as to whether any cost is attributable for earning exempt income in the case of the assessee in order to invoke the provisions of Section 14A and Rule 8D of the Rules. Therefore in the interest of Justice, we hereby remit back the matter to the file of Ld AO for fresh consideration for the both the assessment years. " 3.2. The AO upon receipt of the order from Tribunal (supra) on the issue of disallowance made u/s 14A, directed the assessee to furnish relevant details and after considering the relevant documents/ submission, the AO completed assessment u/s 143(3) r.w.s. 254 of the A....

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....read with rule 8D(2)(ii) of I.T Rules, 1962) needs to be set aside". We also note that the Hon'ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 has laid the proposition of law that, when there are both interest free funds and interest bearing funds, the presumption is that interest free funds were utilized for interest free investment and advances. Such a proposition of law has been upheld by the Hon'ble Supreme Court in the case of CIT v. Reliance Industries Ltd., reported in [2019] 410 ITR 466 (SC); and the Hon'ble Supreme Court in the case of South Indian Bank Ltd. v. CIT reported in [(2021) 130 taxmann.com 178 (SC)] reiterated the position of law and also clarified that it is the asses....

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.... "The special Bench of the Tribunal in Vireet Investments Pvt. Ltd. [2017] 82 taxmann.com 415 (Delhi-Trib.) (SB) has clarified that disallowance under Rule 8D(2)(ii) should be restricted to investments that actually generated exempt income. The Tribunal emphasized that investments which did not yield exempt income during the year should be excluded from the disallowance computation, thereby ensuring that only the relevant investments are considered. The Jurisdictional ITAT 'D' Bench, Chennai, in the case of M/s Ramco Cements Ltd. vs. DCIT, Corporate Circle-2, Madurai (ITA Nos. 957/958/Chny/2016 and 2196/Chny/2019 dated 03/07/2014), provided a significant ruling regarding the disallowance under Section 14A of the Income-tax A....