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TMI Blog2015 (12) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the investment. At no place the AO expressed any dissatisfaction with regard to the correctness of the claim of the assessee with regard to expenditure incurred for earning exempt income. Assessee had all along argued that the loans which were used were only for the purpose of its business. The loans which were used for the purpose of placing investments resulting in tax free income were also furnished by the assessee and this totalled only to ₹ 18,90,931/-. The CIT(A) directed the AO to confine the disallowance under Rule 8D(2)(ii) of the IT Act, 1961 to such amount which is justified - Decided against revenue - ITA No. 525(B)/2015 - - - Dated:- 30-10-2015 - Asha Vijayaraghavan, JM And Abraham P. George, AM For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 65,73,990 (iii) % of the average of the value of investments, Income from which does not or shall not form part of the total income (1/2 % of 72488906 + 130127472/2)=( % of 101308189) ₹ 5,06,541 Disallowance as per Rule 8D Rs.1,27,36,398 An addition for the difference was made. 3. Aggrieved, assessee moved in appeal before the CIT(A). Argument of the assessee was that the similar disallowances were made by the AO in assessment years 2009-10 and 2010-11 also. As per the assessee on its appeal for these years, the CIT(A) had deleted such disallowance. Assessee also stated that the AO had erroneously reckoned interest expenditure of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred for earning the exempt income. Reliance was also placed on the balance sheet as on 31-03-2011 placed at paper book opage-17. 7. We have perused the orders and heard the rival contentions. A look at the balance sheet of the assesee placed at paper book at page-17 show that its share capital of ₹ 21,19,01,000/- and reserves and surplus of ₹ 17,81,28,688/- totaling to ₹ 39,00,29,688/-. Its investments as on 31-03-2011 were only ₹ 13,01,27,472/-. Obviously, assessee had more than enough own funds with it for justifying the investment. Further, it is not disputed that the assessee had made a suo-motu disallowance of ₹ 56,55,867/- as the interest expenditure attributable to the loan fund utilized for the inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) directed the AO to confine the disallowance under Rule 8D(2)(ii) of the IT Act, 1961 to such amount. This Tribunal almost in a similar situation in its order dated 22-01-2015 in ITA No.1352(B)/2012 1326(B)/2013 in assessee s own case had held as under; 7. We have perused the orders and heard the rival contentions. Assessee had share capital and reserves totaling to ₹ 337.287.692 and ₹ 355,450,356 as on 31-03- 2009 and 31-03-2010 respectively, as seen from the audited balance sheet placed at PB page-20 . As against this, its investment in listed shares were ₹ 13,877,323 and ₹ 48,740.155 as per schedule-F to its final accounts placed at PB page-22. Incremental investment were only 1.52 Crores for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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