2019 (4) TMI 1501

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..... vested funds. Once this is the position, the presumption is that the assessee has invested in the investment which gives rise to the exempt income out of own funds in view of HDFC Bank [ 2014 (8) TMI 119 - BOMBAY HIGH COURT] . MAT - Applicability of provisions of section 115 JB in respect to disallowance of expenditure relatable to exempt income under section.14A r.w Rule 8D - HELD THAT:- The issue is squarely covered by the decision of ITAT Delhi, Special Bench in the case of Vireet Investment Pvt Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] wherein, it is held that while applying the provisions of sect ion 115 JB the computation under Clause (f ) of Explanation (1) to sect ion 115 JB(2), the disallowance is to be made without resorting to .....

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..... the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting addition made on account of disallowance u/s 14A r.w. Rule 8D(ii) of the Act without appreciating the fact that the decision in the case of M/s. HDFC Ltd is not applicable since the same has been rendered keeping in mind the investment of Bank and hence Bank specific? 3. Briefly stated the facts are that the assessee has earned dividend income of ₹ 10,23,855/- and claimed the same as exempt. The Assessing Officer after going through the accounts of the assessee noted that Rule 8D of the I.T.Rules applies to the facts of the case and, accordingly, he disallowed interest expenditure under Rule 8D(ii) at Rs. 88,87,743/- and admin .....

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..... res is available and total investment is ₹ 17.73 crores, which is invested to earn exempt income. There are mixed funds and the Assessing Officer has not proved any nexus with the earning of exempt income and the invested funds. Once this is the position, the presumption is that the assessee has invested in the investment which gives rise to the exempt income out of own funds in view of the decision of Hon ble Bombay High Court in the case of HDFC Bank (supra). Respectfully following the decision in the case of HDFC Bank (supra), we affirm the order of the CIT(A) and dismiss the grounds of appeal of the revenue. 6. The second issue in this appeal of the revenue is as regards to applicability of provisions of section 115 JB i .....

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