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TMI Blog2018 (5) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... urred. We therefore adopt judicial consistency in the impugned assessment year as well to confirm the CIT(A)’s findings under challenge. - Decided in favour of assessee - I.T.A No. 1813/Kol/2016 - - - Dated:- 2-5-2018 - S.S. Godara, JM And Shri M.Balaganesh, AM For The Appellant : Shri Sallong Yaden, Addl. CIT For The Respondent : None ORDER Per S.S. GODARA, JM This Revenue s appeal for A.Y.2009-10, arises against the order of C.I.T.(A)- 6, Kolkata dated 17.06.2016 passed in Appeal No.415/CIT(A)-6/Kol/2015-16 reversing AO s action disallowing proportinate interest and administrative expenditure of ₹ 43,21,772/- and ₹ 14,75,525/- respectively u/s 14A r.w.r.8D of the Income Tax Rules, 1962, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 14,75,525/- over and above the sum of ₹ 2,80,412/-. The disallowance of ₹ 14,75,525/- may therefore be deleted. In the present case, as stated hereinbefore, the appellant did not claim any interest expenditure or other expenses in its return filed and disallowed the entire expenses debited in its profit and loss account. The AO by mechanically applying the formula given in Rule 8D (2}(ii) and Rule 8D(2}(iii) disallowed a sum of ₹ 57,97,297/- which was arbitrary and wrong. The appellant also submis that in the assessment the AO has computed under Rule 8D a sum of ₹ 57,97,297/- and disallowed the same u/ s. 14A. The said disallowance was over and above the disallowance of ₹ 16,39, 554/ - made suo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etch of imagination exceed the common expenditure of ₹ 2,80,412/- incurred by the appellant. The AO in his impugned order without appreciating these facts arbitrarily computed disallowance under section 14A by mechanical application of Rule 8D(2)(iii) The appellant further submits that in the appellant's own case for AY 2008-09, the jurisdictional Kolkata Tribunal in ITA No. 1277/Kol/2011 upholding the order of the Ld. CIT(A) held that disallowance under section 14A can come into play only out of expenses claimed for deduction and no further disallowance can be made. The Tribunal in this order held as under: We have also noted that entire expenses incurred by the assessee have been offered for disallowance, and once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deleted in full. 4.1. I have considered the facts and the appellant's submissions. I find that the appellant has claimed total expenses of ₹ 82,83,964/ - including gross interest of ₹ 80,03,552/ Thus, expenses which could have been considered for disallowance under Rule 8D(2)(iii) could not have exceeded ₹ 2,80,412/-. The appellant has suo-moto disallowed this amount in its return of income but the AO has disallowed an additional amount of ₹ 14,75,525/ - although no such expenses have been incurred. Hence, the disallowance of ₹ 14,75,525/ - is deleted. As regards interest expenses, the net interest expenditure after reducing interest income of ₹ 66,44,110/- claimed by the appellant amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration to the Revenue s grievance. Case file perused. There is no dispute about the assessee to have derived exempt income from dividends of ₹ 14,07,853/- in the relevant previous year. We notice that there are two components forming the impugned disallowance. The former one is that of proportionate interest expenditure u/s 8D(2)(ii) of the Income Tax Rules. It has come on record that the ld. Coordinate Bench (supra) in assessee s own case has held that such a disallowance is to be made on netting formula. The assessee has already disallowed entire net interest expenditure of ₹ 13,59,442/- on the very lines. The said co-ordinate bench further concludes regarding administrative expenditure that the same would be exigible to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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