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TMI Blog2019 (3) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... pt income yielding investments were to be considered to arrive at the said disallowance. Therefore, the additional expense disallowance, as computed by Ld. AO could not be sustained. Therefore, we find no infirmity in the stand of Ld. first appellate authority. Provision for Mark to Market Losses [MTM] - HELD THAT:- CIT(A) correctly deleted both the additions by relying upon its own decision in assessee’s own case for AY 2011-12. Aggregate disallowance u/s 14A read with Rule 8D which comprised-off of interest disallowance u/r 8D(2)(ii) and expense disallowance u/r 8D(2)(iii) - AY 2012-13 - HELD THAT:- The assessee’s submissions as extracted in the quantum assessment order reveal that assessee’s own funds far exceeded the investment and therefore, no interest disallowance was justified in the absence of nexus of borrowed funds with the investments. So far expenses disallowance is concerned, it is undisputed fact that no exempt income has been earned by the assessee during impugned AY and therefore, no disallowance on this account - I.T.A. No.6457/Mum/2017, I.T.A. No.6458/Mum/2017, I.T.A. No.6456/Mum/2017, I.T.A. No.6459/Mum/2017 And I.T.A. No.6455/Mum/2017 - - - Dated:- 8-1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. 2.4 The assessee was saddled with another disallowance u/s 14A in view of the fact that it earned exempt dividend income of ₹ 50.02 Lacs from shares / mutual funds and offered suo-moto disallowance against the same for ₹ 2.32 Lacs in the return of income. However, Ld. AO, by applying Rule 8D, worked at aggregate disallowance of ₹ 167.80 Lacs which comprised-off of interest disallowance u/r 8D(2)(ii) for ₹ 150.49 Lacs and expense disallowance u/r 8D(2)(iii) for ₹ 17.30 Lacs. After adjusting suo-moto disallowance offered by the assessee, net disallowance thus made worked out to ₹ 165.47 Lacs which was added to the income of the assessee. 3. The Ld. CIT(A) deleted both the additions by relying upon its own decision in assessee s own case for AY 2011-12. Aggrieved the revenue is in further appeal before us. 4.1 The Ld. Authorized Representative for Assessee [AR], at the outset, submitted that the stand of first appellate authority qua deletion of provision for MTM losses in AY 2011-12 has been confirmed by the Tribunal vide ITA No. 4263/Mum/2016 order dated 09/11/2017 wherein the matter was concluded in the following manner: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5324/M/2007) 2. Edelweiss Securities Limited Vs. Addll. CIT(ITA 2193/M/2009) 3. DCIT Vs. Edelweiss Securities Limited(ITA 7792/M/2012) 4. DCIT Vs. ECL Finance Limited (ITA 7656/M/2011) 5. DCIT Vs. Kotak Mahindra Investment Limited(ITA 1502/M/2012 6. Shri Ramesh Kumar Damani Vs. Addll. CIT (ITA 809/M/2009) 7. M/s Ekansha Enterprises P. Ltd. Vs. DCIT (ITA 809/M/2012) 8. ACIT Vs. Suryakant D. Nissar (ITA 2750/M/2010) 9. DCIT Vs. Edelweiss Securities Limited (ITA 5939/M/2011) In view of the direct decisions on the issue from jurisdictional ITAT the disallowance of ₹ 5,20,75,140/- made on this account is deleted. These grounds of appeal are allowed. 6. On appraisal of the above said finding, we noticed that the claim of the assessee has duly covered by the assessee s own case in ITA. No.2193/M/2009 in which the claim of the assessee has been allowed. The other law mentioned above and relied upon by the CIT(A) also speaks about allowance by claim of the assessee. Since, the issue in question has duly been covered by the above mentioned cases. Therefore, we are of the view that the finding of the CIT(A) is quite correct and is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ari-materia the same, respectfully following the binding decision of this Tribunal in assessee s group concerns, we confirm the stand of first appellate authority in deleting the MTM losses. This ground stands dismissed. 5.2 The assessee has been saddled with aggregate disallowance u/s 14A read with Rule 8D for ₹ 18.56 Lacs which comprised-off of interest disallowance u/r 8D(2)(ii) for ₹ 17.28 Lacs and expense disallowance u/r 8D(2)(iii) for ₹ 1.28 Lacs. No suo-moto disallowance has been offered in view of the fact that no exempt income has been earned by the assessee during impugned AY. The assessee s submissions as extracted in the quantum assessment order reveal that assessee s own funds far exceeded the investment and therefore, no interest disallowance was justified in the absence of nexus of borrowed funds with the investments. So far expenses disallowance is concerned, it is undisputed fact that no exempt income has been earned by the assessee during impugned AY and therefore, no disallowance on this account was warranted in terms of observation of Hon ble Bombay High Court (Nagpur Bench) rendered in PCIT Vs. Ballarpur Industries Ltd. [ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 7.2 The assessee has been saddled with aggregate disallowance u/s 14A read with Rule 8D for ₹ 65.45 Lacs which comprised-off of interest disallowance u/r 8D(2)(ii) for ₹ 35.64 Lacs and expense disallowance u/r 8D(2)(iii) for ₹ 29.80 Lacs. The assessee has offered suo-moto disallowance of ₹ 4.63 Lacs against exempt income of ₹ 14.29 Lacs. The assessee s submissions as extracted in the quantum assessment order reveal that assessee s own funds far exceeded the investment and therefore, no interest disallowance was justified in the absence of nexus of borrowed funds with the investments. So far expenses disallowance is concerned, it is found that 0.5% of average value of investments which have yielded exempt income during impugned AY works out to ₹ 1.96 Lacs as against suo-moto disallowance of ₹ 4.63 Lacs already offered by the assessee and therefore, no further disallowance was warranted. The stand of first appellate authority stands confirmed. 7.3 The appeal stands dismissed. 5. ITA 6455/Mum/2017 : AY 2012-13, M/s ECL Finance Ltd. 8.1 Similarly aggrieved, the revenue is in further appeal before us against the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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