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TMI Blog2012 (8) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... this consolidated order. 2. In the department's appeal, the only issue involved is part relief in respect of disallowance under Section 14A read with Rule 8D, wherein as in assessee's appeal, ground No.1 is in relation to part disallowance made under Section 14A. 3. The Assessing Officer made disallowance of an amount of Rs.3,47,28,575/- under Section 14A r.w.r.8D and made consequent adjustment to computation of book profit u/s. 115JB in view of detail reasoning given by him in the assessment order from para 4 to 4.6. The learned CIT(A) though relied upon the decision of Hon'ble jurisdictional High Court in the case of Godrej and Boyce Mfg. Co. Ltd. Vs. DCIT, reported in 328 ITR 81, but held that disallowance made on the basis formula lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of Bombay High Court in the case of CIT Vs. Reliance Utilities and Power Ltd., reported in (2009) 313 ITR 340 (Bom), has decided the issue in the following manner :- "7. We have considered the rival submissions and perused the relevant material on record. As demonstrated by the learned counsel for the assessee from the balance sheet of the assessee company on 31st March, 2006, shareholders' fund in the form of share capital and reserve and surplus aggregating to `.71.16 crores were available with the assessee company as on 31st March, 2006. Out of the reserves and surplus, revaluation reserves was to the extent of `.10.41 crores whereas remaining reserves available to the assessee to the extent of `.47.89 crores were free reser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it was held that the assessee having sufficient own funds to cover up investments made in shares and securities, no disallowance u/s 14A on account of interest expenditure was warranted. It is also observed that the AO himself did not make disallowance u/s 14A on account of interest expenditure in assessee's own case for assessment year 2005-2006 in the assessment completed u/s 143(3) vide an order dated 20-12-2007 holding that the assessee having sufficient shareholders' fund including internal accruals to make investments in shares and securities, no disallowance u/s 14A was called for. We, therefore, hold that the disallowance made by the AO and confirmed by the learned CIT(Appeals) on account of interest expenditure u/s 14A is not sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on account of interest expenditure under Section 14A is not sustainable and the same is deleted. However, on the disallowance on account of administrative expenses under Section 14A, the tribunal has held that the disallowance should be restricted upto 5% of the dividend earning. In the result, ground No.1 is raised by the department is dismissed and the ground No.1 raised by the assessee is partly allowed as indicated above. 7. In assessee's appeal, in ground No.2, the assessee has challenged the disallowance of Rs.35,136 /- on account of employees' contribution to provident fund which was paid beyond the due date but within the grace period of 5 days. At the outset, learned AR submitted that this issue is now stands covered by the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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