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TMI Blog2014 (4) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... Saktijit Dey,JJ. For the Petitioner : Shri M. V. R. Prasad For the Respondent : Shri Solgy Jose T. Kottaram ORDER Per Saktijit Dey, JM: This appeal by the Assessee is directed against the order of the CIT(A)-IV, Hyderabad dated 10/05/2013 for the assessment year 2009-10. 2. The assessee has raised the following effective grounds: 2) Having held that the interest bearing borrowed funds have not been utilized for making the investments of Rs. 18,89,57,476/- that are held to yield exempt income and having deleted the disallowance of Rs. 8,76,424/- made by the Assessing Officer under the provisions of rule 8D(2)(iii), the ld. CIT(A) ought to have similarly deleted the disallowance of Rs. 7,31,351/- made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, treating it to be the expenditure in relation to earning of dividend income. The AO, however, was of the view that while making disallowance u/s 14A , the assessee has not followed the procedure laid down under Rule 8D of the IT Rules. He, therefore, proposed to compute the disallowance u/s 14A in accordance with Rule 8D. Though the assessee objected to the disallowance proposed by the AO, but, the AO rejecting the same, computed the disallowance u/s 14A read with Rule 8D for an amount of Rs. 20,53,857/-. After adjusting the disallowance of Rs. 4,46,082/- already made by the assessee, balance disallowance made u/s 14A was to the tune of Rs. 16,07,775/-. 5. Being aggrieved of the disallowance made by the AO, the assessee preferred an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing loans and the investment made in shares to conclude that interest expenditure has been incurred for making these investments. However, since the assessee in the computation of income filed along with the return of income made a disallowance of Rs. 2,32,646/- out of the interest expenditure incurred by it, the CIT(A) held that the disallowance of interest expenses to the extent of Rs. 2,32,646/- made by the assessee itself has to be sustained. She further observed that if there was any mistake in the return, the assessee could have rectified by filing revised return of income, but, the assessee cannot obviously file an appeal against its own return of income. Referring to the grounds of appeal taken before the first appellate authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A of the Act. Therefore, the only dispute which remains is with regard to mode and manner of computation of such disallowance, which can be the subject matter of present appeal. The learned DR submitted that since as per the balance sheet of the assessee, the average value of investments is shown at Rs. 18,89,57,476/-, the AO was correct in disallowing the amount of Rs. 9,44,787/- by following the procedure laid down in Rule 8D of the IT Rules. 9. We have heard the arguments of the parties and perused the orders of the revenue authorities as well as other materials on record. The undisputed facts are the assessee in the computation of income filed along with the return of income made a disallowance u/s 14A of the Act, of an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,32,646/- as against the disallowance made by the AO amounting to Rs. 11,09,070/-. The only dispute remains with regard to the % disallowance made on the average value of investments. While the assessee had made % disallowance on an amount of Rs. 4,26,87,166/-, the AO has disallowed % on an amount of Rs. 18,89,57,476/-. As can be seen from the grounds of appeal raised before the CIT(A), the assessee has not challenged the disallowance u/s 14A in its entirety, but, it has only challenged the disallowance of the balance amount of Rs. 16,07,775/- made by the AO. Therefore, at this stage, we cannot accept the contention of the assessee that no disallowance should be made u/s 14A read with Rule 8D. The only issue, in our view, which requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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