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TMI Blog2017 (9) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... s on 31.03.2011, but in its subsidiaries for commercial expediency, the question of disallowance under Rule 8D does not arise. AO has made disallowance without recording his dissatisfaction on any cogent ground and without disputing the computation of disallowance made by the assessee itself rather subjectively written that, “the balance disallowance was to be worked out in view of the provisions contained u/s 14A read with Rule 8D” which is not sustainable in the eyes of law. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Half% of Average Investment B*0.5% 6,43,01,664 Total Disallowance u/s 14A 1+2+3 6,43,01,664 3. Assessee carried the matter by way of filing an appeal before the ld. CIT (A) who has deleted the addition of ₹ 6,41,37,885/- made by the AO by accepting the appeal filed by the assessee. Feeling aggrieved, the Revenue has come up before the Tribunal by way of challenging the impugned order passed by ld. CIT. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. Ld. DR for the Revenue challenging the impugned order contended inter alia that the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. vs. DCIT - 394 ITR 449 (SC) thrashed the issue in controversy as to invoking of the provisions contained under Rule 8D of the Rules by observing as under :- 37. We do not see how in the aforesaid fact situation a different view could have been taken for the Assessment Year 2002-2003. Sub-sections (2) and (3) of Section 14A of the Act read with Rule 8D of the Rules merely prescribe a formula for determination of expenditure incurred in relation to income which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. Whether such determination is to be made on application of the formula prescribed under Rule 8D or in the best judgment of the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the law laid down by Hon'ble Apex Court in judgment cited as Godrej & Boyce Manufacture Company Ltd. (supra) and Hon'ble High Court of Delhi in CIT vs. Taikisha Engineering India Ltd. (supra), we are of the considered view that the findings returned by AO that, "balance disallowance to the tune of Rs.6,41,37,885/- needs to be disallowed as per Rule 8D" are not sustainable in the eyes of law as there is not an iota of reasons of dis-satisfaction recorded by AO as to work out of disallowance of ₹ 1,63,779/- voluntarily made by the assessee itself because sub-section (2) & (3) of section 14A with Rule 8D of the Rules has only prescribed a formula for determination of an expenditure to earn the income which does not form part of the to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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