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TMI Blog2018 (1) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... ores. Later on, a revised return was filed, declaring loss of Rs. 159. 60 crores and book loss of Rs. 79.97 crores. 2. First two Grounds of appeal are about section 14A r.w.r. 8D of Income tax Rules (Rules). First Ground of appeal is about deleting addition of Rs. 23.78 crores made by the AO u/s. 14A of the Act r.w.r. 8D(2)(ii)of the Rules. The second Ground deals with disallowance made under rule 8D(2)(iii). In the appellate proceedings, the First Appellate Authority (FAA) had held that for the purpose of disallowance only those investments have to be considered which would yield exempt income. It was brought to our notice that identical issue was dealt with by the Tribunal while deciding appeal of the assessee for AY. 2012-13(ITA/4008/Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than interest and since the assessee had suo motto disallowed as sum of Rs. 8, 57, 73, 798/-, the balance amount of Rs. 23, 87, 81, 792/- was disallowed being administrative cost for earning exempt income. The Assessing Officer made further disallowance u/s. 14A r. w. Rule 8D of Rs. 26, 46, 62, 753/- (2, 58, 80, 961 + 23, 87, 81, 792) i. e. the difference of attributable interest, which is over and above the suo moto disallowance made by the assessee and added it back to the total income of the assessee. 5. The assessee while computing the book profit u/s. 115JB of the Act made an addition of Rs. 15, 61, 02, 809/- towards interest being expenditure relating to exempt income. The Assessing Officer did not accept the working of the at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: 5.1.4 The same issue had been decided by me in the appellant's case in theirappeal for assessment year 2011-12. The relevant part of that decision is quoted below: "6. 2. 10 I have considered the submissions of the appellant and the order of Assessing Officer. The Assessing Officer has applied the decision of Special bench in case of Cheminvest Ltd. The decision of Cheminvest Ltd. has been reversed by Delhi High Court. The appellant has relies upon the various decisions in support of their contention that the investments which have not yielded any exempt income during the year should be excluded in computing average investments. In other words, as per the appellant only those investments on which the exempt income is received durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us. 10. The ld. Departmental Representative relied upon the grounds of appeal and the orders of the Assessing Officer. 11. Per contra, the ld. Counsel of the assessee submitted that both the issues are covered in favour of the assessee by the Special Bench decision in the case of Asst. CIT vs. Vireet Investment (P. ) Ltd. [2017] 82 taxmann. com 415 (Del - Trib. ) (SB) and also several other decisions of tribunal, wherein the Special bench decision has been followed as above. 12. We have carefully considered the submissions and perused the records. We find that the Revenue's grievance in ground no. 1 is against the ld. CIT(A)'s directions that disallowance u/s. 14A has to be computed only with reference to the investment on whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition draw support from the Special Bench decision in the case of Vireet Investment (P. ) Ltd. (supra). The same ratio has been followed by the Tribunal in the several other decisions following the above said Special Bench decision. In the present case, we note that the assessee has already made an addition of Rs. 15, 61, 02, 809/- towards disallowance of expenditure relating to exempt income. The ld. CIT(A) has further enhanced it by Rs. 40 lacs. The Revenue has not made any submission as to how this disallowance does not suffice. The only plea which has been raised is that the disallowance adopted by the Assessing Officer following Rule 8D in section 14A should be upheld. Since this proposition is not in accordance with the Special ..... X X X X Extracts X X X X X X X X Extracts X X X X
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