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TMI Blog2016 (11) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned, we find that the averment made on behalf of the assessee that the own capital together with accumulated reserves are in excess of corresponding investment remains unrebutted. Therefore, in view of the long line of the judicial precedent on the issue, the disallowance towards proportionate interest under Rule 8D(2)(ii) is not sustainable in the facts. As a result, order of the CIT(A) is partially allowed in terms of our observations noted above. Appeal of the assessee is party allowed. - I.T.A. No.2485/Ahd/2014 - - - Dated:- 25-11-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER And SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER Appellant by : Shri B.T.Thakkar, AR Respondent by : Shri James Kurian, Sr.DR O R D E R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance towards expenditure attributable to tax-free income. The AO invoked the formula laid down under Rule 8D of the IT Rules and computed the disallowance of ₹ 12,343/- under Rule 8D(2)(ii) out of interest expenses and ₹ 9,63,355/- towards administrative and other expenses under Rule 8D(2)(iii) of the Act. Accordingly, aggregate disallowance of ₹ 9,75,698/- was fastened on the assessee while framing the assessment order under section 143(3) of the Act. 4. First appeal of the assessee on the issue of disallowance under section 14A of the Act was dismissed by the CIT(A). 5. Aggrieved by the order of the CIT(A), the assessee is in appeal before the Tribunal. 6. The Ld.AR for the assessee Mr.B.T. Thakkar reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the onus continues to lie on the assessee that no expenditure whatsoever has been incurred or attributable in relation to tax-free income as contemplated under section 14A of the Act. The assessee having failed to discharge the onus, the computation of disallowance as per statutory formula prescribed under section Rule 8D is justified and no interference is called for. 8. We have carefully considered the rival submissions and gone through the orders of the authorities below. The solitary issue for adjudication is correctness of the disallowance under section 14A of the Act. We note that the assessee holds substantial investments which is pegged at ₹ 41.92 crores as on 31/03/2009 and ₹ 35.16 crores as on 31/03/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been enacted for such eventualities where it is not possible to allocate the indirect expenditure towards administration, etc. with any scientific accuracy. In the circumstances, we do not see any logic in the arguments of the assessee in so far as disallowance under Rule 8D(2)(iii) is concerned. However, in so far as disallowance of interest towards interest is concerned, we find that the averment made on behalf of the assessee that the own capital together with accumulated reserves are in excess of corresponding investment remains unrebutted. Therefore, in view of the long line of the judicial precedent on the issue, the disallowance towards proportionate interest under Rule 8D(2)(ii) is not sustainable in the facts. As a result, ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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