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TMI Blog2015 (10) TMI 2709X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer(AO),has filed following Grounds of Appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the assessing officer to consider net interest for the purpose of computing interest expenditure u/s 14A r.w.r 8D. without appreciating that, in fact the interest expenses debited by the assessee in its P L A/c cannot be directly linked with the interest income. 2. On the facts and in the circumstances of the case and in law. the Ld. CIT(A) erred in directing the Assessing Officer to consider net interest for the purpose of computing interest expenditure u/s. 14A r.w.r 8D, without appreciating that, there is no provision in the Act, that the interest expenses should not be adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FAA and stated that the AO had erred in not accepting the decisions of various Tribunals wherein it has been conclusively held that net interest amount debited to P L Account was to be worked out on pro rata basis,while working out the disallowance u/s. 14A r.w. Rule 8D, that the AO had considered current assets instead of total assets as stipulated in clause 2 of Rule 8D while calculating disallowance, that not disallowance was to be made in the light of the decision of Godrej Boyce Mfg. Ltd. (supra).The assessee referred to the cases of Chem Invests Ltd. and Keshav Sales and Stocks Ltd. After considering the submission of the assessee and assessment order,the FAA held that the assessee had made average investment of ₹ 1.25 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR supported the order of the FAA.We find that in the matter of Maxopp Investment Ltd.(supra),the Hon ble Delhi High Court has dealt the issue of apportionment of interest as under: If one examines sub-rule (2) of rule 8D ,the method for determining the expenditure in relation to exempt income has three components.The first component is the amount of expenditure directly relating to income which does not form part of the total income. The second is being computed on the basis of the formula given therein in a case where the assessee incurs expenditure by way of interest which is not directly attributable to any particular income or receipt. The formula essentially apportions the amount of expenditure by way of interest (other than the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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