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TMI Blog2017 (9) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... is now settled by the Special Bench Delhi in the case of ACIT v. Vireet Investments Private Limited (2017 (6) TMI 1124 - ITAT DELHI ) 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 I.T. Rules. Therefore, respectfully following the said decision we hold that there should not be any disallowance u/s 14A read with Rule 8D while computing the book profits u/s 115JB of the Act. Thus, we direct the Assessing Officer to compute the book profits u/s 115JB keeping in view the decision of the Hon’ble Special Bench (supra). This ground of appeal is allowed for statistical purpose. Addition u/s 14A - Assessment Years 2009-10 and 2010-11 - Held that:- Disallowance computed u/s 14A r.w. Rule 8D by the Assessing Officer is not correct. Thus we restore this issue to the file of the Assessing Officer with a direction to re-compute the disallowance under Rule 8D(2)(iii) in view the decision of the Delhi Bench in the case of ACIT v. Vireet Investments Private Limited [2017 (6) TMI 1124 - ITAT DELHI] by considering only those investments which yielded dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of their power projects and these expenses have no relation to the earning of dividend income in the Assessment Years 2009-10 and 2010-11 respectively. Assessee provided the details of allocation of expenses as it thought appropriate and the only expenses relevant for disallowance u/s 14A, as reasonable are ₹.42,48,568/- and ₹.42,48,093/- respectively for the Assessment Years 2009-10 and 2010-11. Without prejudice to the above contentions assessee also made a claim that while computing the disallowance u/s.14A r.w. Rule 8D only those investments which have actually yielded income during the year should be considered and not all the investments and assessee has given the working of disallowance taking only the dividend yielded investments during the year and worked out the disallowance at ₹.12,78,65,570/- and ₹.8,64,29,883/- for the Assessment Years 2009-10 and 2010-11 respectively. The Assessing Officer not convinced with the reply furnished by the assessee rejected the submissions of the assessee and the allocation of expenses made by the assessee in making the suo moto disallowance, invoked the provisions of setion 14A read with rule 8D of I.T. Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not satisfactory to him computed the disallowance u/s 14A r.w. Rule 8D. Ld. Counsel submits before us is that there is no satisfaction record by the Assessing Officer. On a perusal of the Assessment Order we find that Assessing Officer has clearly stated as to why the working of the assessee is not acceptable for him. Assessing Officer has given reasons for not accepting the working of the assessee. Therefore, it cannot be said that there is no satisfaction recorded by the Assessing Officer. The alternative submission of the assessee that only those investments which have yielded dividend income during the year should be considered has been accepted by the Ld.CIT(A). In the circumstances we do not see any valid reason to interfere with the decision of the Ld.CIT(A). Ground No.1 of the grounds of appeal of the assessee for the Assessment Years 2009-10 and 2010-11 are rejected. 9. Ground No.2 of the assessee s appeals in respect of the disallowance made u./s 14A while computing the book profits u/s 115JB of the Act. 10. The Learned Counsel for the assessee submits that the Assessing Officer while computing the book profits made disallowance u/s 14A the same amount which was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is against the confirmation of disallowance made u/s 14A r.w. Rule 8D in the normal computation of income. 16. The Learned Counsel for the assessee submits that facts in these appeals are also almost similar. However, he submits that the Ld.CIT(A) sustained the disallowance made by the Assessing Officer without considering the alternative claim of the assessee that only those investments which yielded dividend during the year should be considered for computing disallowance under Rule 8D. The Learned Counsel for the assessee submits that, the contention of the assessee is that only those investments which yielded dividend income during the year should be considered for computing the disallowance under Rule 8D r.w.s 14A has been rejected following the Special Bench decision in the case of Cheminvest Limited [121 ITD 318]. The Learned Counsel for the assessee submits that this decision of the Special Bench has been reversed by the Delhi High Court in the case of Cheminvest Limited v. CIT [378 ITR 33 Delhi]. He further submitted that recently the Special Bench of Delhi in the case of ACIT v. Vireet Investments Private Limited (supra) held that only those investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of ACIT v. Vireet Investments Private Limited (supra) by considering only those investments which yielded dividend income during the Assessment Years 2009-10 and 2010-11. This common Ground is allowed for statistical purpose. 20. The second common ground of appeal is in respect of disallowance u/s 14A while computing the book profits u/s 115JB of the Act. 21. This issue is also covered by the decision of the Special Bench Delhi in the case of ACIT v. Vireet Investments Private Limited (supra) 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 I.T. Rules. Thus respectfully following the said decision we direct the Assessing Officer to compute the book profits u/s 115JB of the Act in accordance with the directions of the Special Bench (supra). This common ground of appeal is allowed for statistical purpose. 22. Coming to the Revenue s appeals only grievance of the revenue in its appeal is that the Ld.CIT(A) is not justified in restricting the adjustment to book profits on account of expenses relatable to exempt income, u/s.14A of the ..... 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