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TMI Blog2015 (12) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. As the Department has accepted a similar claim in similar circumstances in AY 1998-99 and also for the AY 2005-06 thus keeping in view the principle of consistency, the Revenue could not be permitted to raise an issue in isolation only for one year in the case of one assessee, while accepting the findings on the same issue in the case of other assessees and for the other years in the case of the assesssee.- Decided in favour of assessee Disallowance u/s 14A - Held that:- Since there is a frequent movement in the investment portfolio of the assessee therefore, the question which requires to be ascertained by indentifying the particular items of the expenditure debited by the assessee in the profit and loss account whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the following grounds have been raised: i. On the facts and in the circumstances of the case the learned CIT(A) erred in law in deleting the addition made by the AO u/s 26(1)(iv) by placing reliance on the decision of the ITAT, Bangalore in the case of assessee for AY 2007-08 without appreciating the fact that the Department has not accepted that decision of the ITAT and further appeal has been filed before the High Court. ii. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) is so far as it relates to the above grounds may be reversed and that of the AO may be restored. 3. The assessee claimed ₹ 81,57,099/- as Revenue expenditure for payment towards intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/Bang/2002 remanded the issue back to the file of the AO for fresh adjudication vide order dated 4.10.2003. The AO in accordance with the Tribunal's directions considered the matter and decided the issue in favour of the assessee vide order dated 21.12.2004, a copy of which was furnished by the learned counsel for the assessee during the course of hearing and is available on record. It is also seen that for the AY 2005-06, an addition on the same issue has been deleted by the learned CIT(A). The contention of he learned counsel for the assessee that this order dated 27.2.2009 passed by the learned CIT(A)-V, Bangalore for the AY 2005-06 was not challenged by the Department in further appeal has been rebutted. From the above facts, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the CIT(A). Accordingly, Revenue's appeal is dismissed. 6. CO 74/Bang/2014 as well as the appeal in ITA No.470/Bang/2014 filed by the assessee raised common grounds as under: i. That the orders of the authorities below in so far as it is against the appellant is against the law, facts, circumstances, natural justice, without jurisdiction, band in law and all other known principles of law. ii. The total income computed and total tax computed is hereby disputed. iii. The learned CIT(A) erred in upholding the disallowance made u/s 14A of the Act amounting to ₹ 41,86,447/-. 7. From the grounds, in the cross objection as well as in the appeal filed by the assessee, the only issue raised is regarding disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure which can be apportioned for earning the exempt income then the disallowance made by the AO is not sustainable. 10. On the other hand, learned DR has submitted that as per Rule 8D disallowance is worked out being 0.5% of the average investment. Therefore, the AO has proceeded as per the provision of the Act as well as Rules. He has further contended that the AO has not made any disallowance on account of interest expenditure. Therefore, the contention of the assessee that the investment is made from its own funds is not relevant. He has relied upon the orders of the authorities below: 11. We have considered the rival submissions as well as relevant material on record. We note from the details filed by the assessee that during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of disallowance u/s 14A. The AO has not given any finding or identified the expenditure which can be allocated for earning the exempt income. Therefore, this issue is set aside to the record of the AO for proper verification and for identifying expenditure which can be treated as allocable for the purpose of earning the dividend income and consequently can be disallowed u/s 14A of the Act. We make it clear that the disallowance made u/s 14A and quantum of disallowance worked out as per Rule 8D can't exceed the actual expenditure debited by the assessee in the profit and loss account which has a nexus for earning exempt income. Accordingly the AO is directed to re-adjudicate the issue after giving an opportunity of hearing to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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