9911796707
TMI Blog2019 (4) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground no.1 of revenue's appeal is as under: "1. The Ld. CIT(A) erred in holding that for disallowance under Rule 8D(2)(ii), only those investments have to be taken into account from which exempt income has earned ignoring the fact that the provisions of section 14A of the Act read with the parameters laid down in Rule 8D(2)(iii) & CBDT Circular No. 5/2014, there is no ambiguity that all the investments from which the assessee could have earned exempt income are required to be considered for computing disallowance u/s. 14A." 3. After having heard both the parties and after perusal of the assessment order, we note that the ground raised by the revenue involves the further disallowance of Rs. 35,55,156/- u/s. 14A of the Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, the appeal of the revenue is dismissed. 6. Coming to assessee's appeal. The sole ground of appeal raised by the assessee is as under: "For that under the facts & circumstances of the case, the Ld. CIT(A) erred in law as well as on fact in confirming the disallowance on account of depreciation claim of Rs. 21,00,707/- u/s. 14A of the Act read with rule 8D(2)(ii) of the I. T. Rules, 1962." 7. Briefly stated facts are that during the year the assessee company filed its return of income u/s. 139(1) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") showing a total income of Rs. 8,23,14,780/- besides disclosing exempt dividend income of Rs. 40,89,455/- u/s. 10(34) of the Act. In respect to the said exempt inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ratio of these cases. Thus, on consideration, we find that section 14A uses the words "expenditure incurred by the assessee in relation to income". A statutory allowance under section 32 is not an expenditure. Therefore, we are in agreement with the decision of the Division Bench in the case of Hoshang D. Nanavati."
9. Respectfully following the ratio laid by the Hon'ble Supreme Court in Nector Beverages Pvt. Ltd. Vs. DCIT (2009) 314 ITR 314 (SC) and the decision of Special bench in Vishnu Anant Mahajan (supra), we allow the ground of appeal raised by the assessee.
10. In the result, appeal of revenue is dismissed and that of the assessee is allowed.
Order is pronounced in the open court on 11.04.2018 X X X X Extracts X X X X X X X X Extracts X X X X
|
