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TMI Blog2013 (8) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... on itself does not carve out any such exception - Once it is not disputed that the provision of rule 8D are applicable on the conditions stated therein, then disallowance has to be made as per the formula given in rule 8D, except when the assessee brings out cogent material on record to show that a particular expenditure as provided in the formula was not attributable to earning of the exempt income - Following decision of Cheminvest Limited. Versus Income Tax Officer, Ward 3(3), New Delhi. [2009 (8) TMI 126 - ITAT DELHI-B] - Decided against assessee. - ITA No.5039,4419,5285/Mum./2011 - - - Dated:- 19-7-2013 - R S Syal and Amit Shukla, JJ. For the Appellant : Mr Jitendra Sanghvi For the Respondent : Mr Rakesh Ranjan Prasad ORDER:- PER : Amit Shukla These cross appeals have been preferred by the rival parties challenging the impugned order dated 21st April 2011, passed by the learned Commissioner (Appeals)-XXI, Mumbai, for the quantum of assessment passed under section 143(3) of the Income Tax Act, 1961, for the assessment year 2008-09. 2. At the outset, the learned authorized representative, on behalf of the assessee, submitted before us that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the provisions of Electricity Supply Act and not in accordance with the provisions of Part II III of schedule VI of the Companies Act. 7. The appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the Assessing Officer be restored. 4. Before us, both the parties have fairly admitted that all the grounds raised in this appeal are covered by the earlier decisions of the Tribunal in assessee s own case right from the assessment years 1999-2000 to 2007-08. The compilation of such case laws was filed before us in the form of paper book. The learned Departmental Representative, however, chose to rely upon the order passed by the Assessing Officer. 5. The Tribunal in ITA no.5692/Mum./2010 and ITA no.6760/Mum./2010, for the assessment year 2007-08, vide order dated 28th September 2011, has considered all the grounds which are identical to the grounds raised in the present appeals, therefore, a reference has been made of the earlier orders passed by the Tribunal and the same was relied upon. The learned Commissioner (Appeals) also in respect of all the grounds has decided the issues in favour of the assessee, following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in assessee s own case cited supra, consequently, the ground raised by the Revenue is treated as dismissed. 14. In ground no.5, the Revenue has challenged the allowance of deduction under section 80IA to the extent of gross total income and not to the extent of net business income. 15. This issue has been discussed by the Tribunal in its order cited supra from Paras-29 to 35, wherein the Tribunal, after detailed discussion, has followed the decision of the Tribunal in assessee s own case for the assessment years 2001-02 to 2005-06. Since the issue before us is identical to the issue decided by the Tribunal in assessee s own case cited supra, consequently, the ground raised by the Revenue is treated as dismissed. 16. In ground no.6, the Revenue has challenged non-applicability of the provisions o section 115JB. 17. We find that the Tribunal, in its order cited supra, in assessee s own, vide Paras-37 to 40, has decided the issue in favour of the assessee. Since the issue before us is identical to the issue decided by the Tribunal in assessee s own case cited supra, consequently, the ground raised by the Revenue is treated as dismissed. 18. Ground no.7 and 8 being gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee. The net addition of Rs. 65,58,58,204, was made in the in the assessment order. 22. The assessee, before the learned Commissioner (Appeals), submitted details of the borrowed funds as on 31st March 2008 and as on 31st March 2007, and also the details of financial expenditure and interest charges incurred by it and contended that the investment in the securities giving rise to exempt income was made out of surplus funds over the period of time and no expenditure in the nature of interest had been incurred in earning the aforesaid income. As regards other incidental expenditure, it was submitted that dividend warrants and interest warrant in respect of exempt income has been received either once or twice in the year which was received directly by the party, hence, there was no actual expenditure incurred by way of collection charges or in any other form. Thus, in the absence of any specific expenditure having been incurred for the purpose of earning the exempt income, disallowance under section 14A could not have been made. It was further submitted that the assessee has paid-up capital in the reserves at the beginning of the year at Rs.9339 crores. As against this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be considered for the purpose of disallowance because no expenditure can be said to be attributable to such income. In any case, the disallowance sustained by the ld. CIT(A) is very high and excessive. He has not disputed before us that rule 8D will not apply on the facts of the case. 25. Learned Departmental Representative, on the other hand, relied upon the findings of the Assessing Officer as well as the learned CIT (Appeals). 26. We have carefully considered the rival contentions, perused the relevant findings of the Assessing Officer as well as that of the learned Commissioner (Appeals) and the material placed on record. It is not in dispute that the assessee has earned huge dividend income which has been claimed as exempt and for the purpose of disallowance under section 14A, it has disallowed a sum of Rs.5,46,16,385. The assessee s working of disallowance was too based on rule 8D. However, in its working, the assessee has not considered those investments which have not yielded any income. In our opinion, such a working is not correct, as once the expenditure has been incurred in relation to an income which do not form part of the total income, then the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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