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TMI Blog2013 (3) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... ested by the assessee in share capital of certain firms, interest from which was offered for taxation - Held that:- Special Bench of the Tribunal in the case of Vishnu Anand Mahajan v. ACIT [2012 (6) TMI 297 - ITAT, Ahmedabad] has discussed the issue when there is receipt of interest from the firm chargeable to tax and share in the profits which is exempt. In this order the Special Bench has laid down a mechanism for working out the disallowance u/s 14A. The Assessing Officer is directed to work out the second part of disallowance as per Rule 8D afresh in the light of the afore-noted order of the Special Bench after allowing a reasonable opportunity of being heard to the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... which its own free reserves and share capital were to the tune of ₹ 119.85 crore. The learned CIT(A) did not consider this fact as relevant and upheld the disallowance. 4. Section 14A basically provides that no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act. Thus, it is abundantly clear that the incurring of any expenditure in relation to exempt income is sine qua non for qualifying as to disallowance u/s 14A. Unless there is some deduction claimed for expenses qua the exempt income, the disallowance u/s 14A does not get triggered. Here is a case in which the assessee categorically submitted before the learned CIT(A) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the value of investment, income from which does not form part of total income. Principally we see no reason to interfere with the disallowance made as per Rule 8D because the assessment year under consideration is 2008-2009 and as per the judgment of the Hon'ble jurisdictional High Court in case of Godrej & Boyce Ltd. Mfg. Co. VS. DCIT [(2010) 328 ITR 81 (Bom)], disallowance u/s 14A is maintainable as per Rule 8D from assessment year 2008-2009 onwards. 6. The learned AR contended that while computing the said disallowance at ₹ 16.92 lakhs, the Assessing Officer also included the amount invested by the assessee in share capital of certain firms, interest from which was offered for taxation. From the assessment order it can be see ..... X X X X Extracts X X X X X X X X Extracts X X X X
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