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TMI Blog2019 (9) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred by the assessee is thus allowed - I.T.A. No. 2332/Ahd/2017 - - - Dated:- 20-9-2019 - Shri O. P. Meena, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri S. N. Soparkar, Sr. Advocate with Parin Shah For the Respondent : Shri L. P. Jain, Sr. D.R. ORDER PER Ms. MADHUMITA ROY - JM: The instant appeal filed by the assessee is directed against the order dated 28.08.2017 passed by the Commissioner of Income Tax (Appeals) Gandhinagar, Ahmedabad under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to the Act ) arising out of the order dated 06.12.2016 passed by the Income Tax Officer, Ward-5, Gandhinagar for Assessment Year 2014-15. 2. Ground No. 1:- The assessee has challenged the order passed by the Ld. CIT(A) in confirming the disallowance made under section 14A r.w.r. 8D. At the time of the hearing of the instant appeal the Ld. Senior Counsel appearing for the assessee and submitted before us that the issue is squarely covered in assessee s own case for A.Y. 2011-12 under the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt income. The details of investment made by the assessee in respect of three companies were duly submitted before the Learned AO. It was the case of the assessee that since there were no borrowing and no interest expenses incurred for earning the exempt income disallowance cannot be made. Further that, disallowance made in respect of interest expenses earlier was also deleted by the appellate authorities. Alternatively, the assessee submitted that if any expenses could be sought to have been incurred in relation to such exempt income the same could be all administrative nature for receiving the cheques and depositing the same in the Bank account. According to the assessee, the approximate sum was ₹ 1000/- only to be the expenses incurred in relation to exempt income applying under provision of section 14A of the Act. However, since the assessee has already disallowed ₹ 1,00,000/- no further disallowance can be made. However, applying section 14A r.w.r. 8D, the Learned AO disallowed ₹ 47,23,579/- which was deleted by the Learned CIT(A) relying upon the judgment passed by the Jurisdictional High Court in assessee s own case in Tax Appeal No.1587 of 2009 for A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned AO without any infirmity so as to warrant interference. The question is accordingly answered in the affirmative, i.e. in favour of the assessee and against the revenue. Consequently, the appeal fails and accordingly dismissed. 5. In the appeal preferred by the Revenue. 6. We further find that this particular issue has also been dealt with in ITA No. 1928/Ahd/2016 for A.Y. 2012-13. The relevant portion whereof is as follows:- 29. Ground No.1 This ground relates to disallowance u/s 14A r.w.r. 8D to the tune of ₹ 51,61,079/- under normal provision. 30. Upon verification of the Profit and Loss account for A.Y. 2011-12, it was found that the assessee has earned dividend income of ₹ 1,71,72,097/- during the year under consideration which was claimed to be exempt u/s 10(34) of the Act in the statement of total income. Further that, the assessee has disallowed suo moto sum of ₹ 1,00,000/- as expenses relating to the earning of such exempt income. The assessee s case is that investment on which exempt income has been earned were not made from interest bearing funds as there are no borrowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 115JB of the Act. 33. It appears that the Learned AO disallowed ₹ 51,61,079/- u/s 14A of the Act by applying provision of Rule 8D while calculating income under the provision of section 115JB MAT (disallowance as per assessment order ₹ 52,61,079 = already disallowed in the return of ₹ 1,00,000/-). It is the case of the assessee that the Learned AO erroneously disallowed u/s 14A by applying the provision of Rule 8D while calculating the income under provision of Section 115JB MAT when it has been decided in number of judgments that so far as computation of adjusted book profit is concerned provision of section 2 and sub section 3 of section 14A cannot be imported into clause (f). In support of his argument he has also relied upon the judgment passed by the Special Bench of ITAT at Delhi in the matter of ACIT, Circle 17(1)-vs-Vireet Investment (P.) Ltd. On the other hand, Learned DR relied upon the order passed by the authorities below. 34. Heard the respective parties, perused the relevant materials available on record. We have also carefully considered the judgment in the matter of Vireet Investment (P.) Ltd. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed in clause (f) and, therefore, the submission of the assessee that only directly relatable expenditure is to be reduced, cannot be accepted. [Para 6.10] In view of above discussion, the computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to the computation as contemplated under section 14A, read with rule 8D of the Income-tax Rules, 1962. We find from the issue citation that in the same set of facts the computation under clause (f) of explanation 1 to section 115JB as has been done by the authorities below u/s 14A r.w.r. 8D of the Income Tax Act, 1962 is not permissible and hence such disallowance is quashed the addition is therefore deleted. This ground of appeal preferred by the assessee is thus allowed. Since the identical issue has already been decided as aforesaid by the Co-ordinate Bench in favour of the assessee, in the absence of any changed circumstances, respectfully relying upon the same we delete the addition made by the authorities below. Hence, assessee s appeal is allowed. Ground No. 3:- 10. It is general in nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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