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2019 (12) TMI 959 - ITAT MUMBAIAddition u/s 68 - genuineness of the transaction, creditworthiness & identity of the creditors - HELD THAT:- We are not inclined to accept to the finding of the ld. CIT(A) with M/s.Rabna Holdings Ltd. is only a mere pass through entity and M/s. Amas Ltd., being incorporated in Bahamas is found to be a tainted entity. All these observations of the CIT(A) are purely without any basis and not supported by any material evidences brought on record. This is a classic case of the CIT(A) disbelieving the information obtained by CBDT, FT & TR division from Mauritian tax authorities under exchange of information in terms of Section 90 of the Act and relevant DTAA Article. AR placed on record various case laws in support of its contentions. Since this is purely a factual matter, we do not find it necessary to look into those case laws as in our considered opinion, assessee had duly established three necessary ingredients of Section 68 of the Act of facts and on merits duly supported by all documentary evidences. In view of the aforesaid observations, we direct the ld. AO to delete the addition made in the sum of ₹ 155 Crores u/s.68 of the Act. Accordingly, the ground Nos.1 to 4 raised by assessee are allowed. Addition made under the head ‘income from house property’ in respect of unit No.701 in the building Marvella - HELD THAT:- Assessee had genuine intention to let out unit No.701 along with other units in the same premises and derive rental income thereon. But due to circumstances beyond its control, it could not do so till 31/12/2014 in respect of unit no. 701 alone and ultimately the said unit after making certain structural corrections had been let out to Hinduja Healthcare Ltd., from 01/01/2015 onwards and rental income derived thereon. Hence, for A.Y.2014-15, this property was not let out as it was remaining vacant and hence, the annual letting value in terms of Section 23(1)(c) of the Act should have to be determined at Rs. Nil. We direct the ld. AO to determine the Annual Letting Value (ALV) of Unit No.701 at Rs. Nil and delete the addition made thereon. Accordingly, the ground No.5 raised by the assessee is allowed. Disallowance u/s.14A under normal provisions - HELD THAT:- From the perusal of the balance sheet, we find that assessee had got sufficient own funds in its kitty and hence, there is no need to make any disallowance of interest under second limb of rule 8D(2) of the rules. Accordingly, by placing reliance on the decision of Hon’ble Jurisdictional High Court in the case of HDFC Bank [2018 (1) TMI 883 - ITAT MUMBAI] and Reliance Utilities and Power Pvt. Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] we direct the ld. AO to delete the disallowance made under second limb of rule 8D(2) of the rules. With regard to the third limb, we hold that only investments that had yielded exempt income should be considered and the ld. AO is directed to recompute the disallowance under third limb of rule 8D(2) of the rules accordingly. The disallowance made under first limb of rule 8D(2) will remain. Disallowance u/s.14A of the Act r.w.r.8D of the rules while computing book profits u/s.115JB - HELD THAT:- Special Bench of Delhi Tribunal in the case of Vireet Investments [2017 (6) TMI 1124 - ITAT DELHI] had held that the computation mechanism provided in rule 8D(2) of the rules cannot be imported into clause of Explanation-1 to section 115JB (2) of the Act. The Special Bench further held that the disallowance of expenses under Clause f need to be made based on actual expenditure debited to profit and loss account by the assessee by clearly identifying the same for the purpose of earning exempt income. Hence, we deem it fit and proper to remand this issue to the file of the ld. AO for denovo adjudication
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