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TMI Blog2019 (5) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. Quantifying the disallowance of expenditure u/s 14A - HELD THAT:- Mistake pointed out by the assessee that for AY 2007-08, the following ground No. 1(f) and 2(f) have not been adjudicated, which are regarding quantifying the disallowance of expenditure in relation to exempt income under Rule 8D(2)(iii) of the Act in respect to expenditure on account of salaries and allowances, conveyance, communication expenses and printing and stationary. We noted that this ground has not been adjudicated but it was contended by assessee that even in the earlier years the Tribunal has consistently made disallowance of expenses relatable to exempt income at the rate of 1% of the exempt income. She argued that the same decision should be made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the years and facts and circumstances are also identical as conceded by both the sides. Hence, we will take the grounds from AY 2006-07 and decide the issue. The following are the grounds raised by the assessee: -. 1.2 Without prejudice to the prayer made hereinabove and in the alternate, it is humbly prayed that in the event it is held that the exemption under section 10(23G) of the Act is to be granted at net interest income, i.e. net of interest cost, if any, then, for the said purpose, interest cost actually incurred on earmarked borrowings utilized by the appellant for granting long term finance to the enterprises, interest income whereof is exempt under section 10(23G) of the Act, is only to be considered and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: 7. At the outset, the learned Counsel for the assessee stated that this issue is covered in favour of assessee by the Tribunal decision as reproduced above of the Tribunal order in ITA No. 7361/Mum/2005 for AY 2000-01 order dated 14-08-2013 and also for AY 2005-06 in ITA No.347/Mum/2008 order dated 23-09-2015 wherein Tribunal vide para Para 3.6 decided the issue after following earlier years Tribunal s decision as under: - 3.6. The perusal of the above order would reveal that Hon ble Bench has taken a view that Revenue cannot take a view of proposing the cost of interest to be separately induced on the assessee, as the entire costs have already got embedded in the costs/total expenses. Further, in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk Ltd., supra. Thus, respectfully following the judgment of Hon ble Coordinate bench in the own case of the assessee and in view of the judgments of Hon ble jurisdictional High Court, we hold that deduction for the interest cost incurred was to be taken only in relation to earmarked borrowings utilized by the assessee for the purpose of granting loans to the enterprises, interest income whereof is exempt u/s 10(23G) of the Act for the purpose of computing net interest income eligible for deduction u/s 10(23G) of the Act. Thus, Ground No.1(a)(ii) and Ground No.2(a)(ii) are allowed. As this issue is covered in favour of assessee by following earlier years decision in assessee s own case. Respectfully, following the same, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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