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TMI Blog2017 (9) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... vit giving reasons for the delay. Ld. DR has no serious objection in condoning the delay. Having gone through the reasons explained in the petition and the affidavit we are of the view that there is sufficient and reasonable cause in not filing appeal in time. In the circumstance we condone the delay of 23 days and admit the appeal for disposal on merits. 2. The first ground of the grounds of appeal of the assessee is that the Ld.CIT(A) erred in restricting the disallowance under Rule 8D r.w.s.14A of the Act to Rs..44,41,825/- and the second ground of appeal is regarding disallowance u/s 14A of the Act while computing the book profits u/s 115JB of the Act. The Ld.CIT(A) directed the Assessing Officer to disallow Rs..44,41,825/- in computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Ld.CIT(A) and contended that there was no satisfaction recorded by the Assessing Officer as to why appellant's offer of disallowance was not correct. It was also further contended that the employee cost in respect of Engineering Procurement and Construction (in short "EPC") division and sale of energy and trading in goods division were not pertinent to the earning of dividend income. It was also contended that the balance expenses other than the expenses in these divisions amounted to Rs..2,65,82,407/- and out of this Rs..1,77,10,351/- was already disallowed in the revised computation of income leaving a balance of other expenses of Rs..88,72,056/-. 5. However, the Ld.CIT(A) by observing that there are huge average inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 7. We have heard the rival submissions, perused the orders of the authorities below. The Assessing Officer disallowed Rs..4,61,42,677/- u/s 14A of the Act being the 0.5% of average value of investments applying Rule 8D (2)(iii) as expenses attributable for earning exempt income, apart from the suo motu disallowance of Rs..22.83 Crores made by the assessee being interest on loans. Assessee contended that there was no employee cost for earning exempt income. The Ld.CIT(A) however estimated the expenses attributable for earning exempt income at 5% of the employee cost of EPC division. This estimation of the Ld.CIT(A) appears to be not justified for the reason that EPC division is not the decision making authority for making investments. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he estimation of disallowance made by the Ld.CIT(A) in respect of the exempt income u/s 14A r.w. Rule 8D of I.T. Rules is not justifiable and hence the same is deleted. 8. In so far as Ground No 2 is concerned the issue is squarely covered by the Special Bench of the Delhi Bench in the case of ACIT v. Vireet Investments Private Limited [82 Taxman.com 415] wherein it has been held that computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w Rule 8D of the Act. Thus respectfully following the Special Bench decision we direct the Assessing Officer to compute the book profits u/s 115 JB in accordance with the directions of the Hon'ble Special Bench in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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