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TMI Blog2020 (12) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... s.1-3 raised by the assessee are partly allowed. Disallowance u/s.14A of the Act r.w.r. 8D - Assessee suo moto disallowed expenses - HELD THAT:- We find that the ld. CIT(A) had directed the ld. AO to consider only those investments which had actually yielded exempt income for the purpose of working out the disallowance u/s.14A of the Act r.w.r. 8D(2)(iii) of the rules. This is in consonance with the Special Bench Delhi Tribunal in the case of Vireet Investments [ 2017 (6) TMI 1124 - ITAT DELHI ] - We are in complete agreement with such direction of the ld. CIT(A). We further direct the ld. AO that in any case, the disallowance made u/s.14A of the Act cannot exceed the exempt income earned by the assessee. From the disallowance so computed as per the aforesaid directions, needless to mention that voluntarily disallowance made by the assessee in the sum of 60,000/- is to be reduced by the ld. AO. X X X X Extracts X X X X X X X X Extracts X X X X ..... Villa, Dubai in the sum of ₹ 62,04,209/- and after granting statutory deduction under the head 'income from house property' u/s.24 of the Act, sought to determine the taxable income from house property in respect of this property at ₹ 43,42,946/-. This addition was made by the ld. AO on the basis of similar addition being made for A.Yrs.2010-11, 2011-12 and 2012-13 in assessee's own case where the additions were confirmed by the first appellate authority and the appeals were pending before this Tribunal at the behest of the assessee at the time of framing of assessment. During the course of assessment proceedings, the assessee vide letter dated 20/01/2016 of its authorized representative submitted that no notional house property income was taxable in India in respect of self-occupied house property in UAE based on Article 6 of the Double Taxation Avoidance Agreement (DTAA) between India and UAE and also interpretation of the relevant clauses of the protocol between two countries. The ld. AO also observed that assessee had suomoto offered an income of ₹ 51,27,445/- on account of Dubai Palm Signature Villa property in the return of income filed for A.Y.2011-12 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed in pages 26-51 of the paper book filed before us. From the perusal of the said valuation report, we find that the valuer had categorically mentioned the suo moto value of the subject mentioned property for different parties as under:- Period Estimated Rental Value Ranging From 2008 AED 8 Lakhs to 9 Lakhs 2009 AED 7 Lakhs to 8 Lakhs 2010 AED 6 Lakhs to 6.50 Lakhs On the day of inspection i.e. 11/08/2011 AED 4.50 Lakhs to 5.50 Lakhs 3.2. From the aforesaid table, it could be seen that the rental value had been consistently showing a declining trend in respect of subject mentioned property at Palm Signature Villa, Dubai. Hence, we hold that there is absolutely no justification for the ld. AO to adopt an adhoc increase on 10% over and above the value assessed in the previous year. Hence, we direct the ld.AO to determine rental income without making any adhoc increase of 10% for the year under consideration. Accordingly, the ground Nos.1-3 raised by the assessee are partly allowed. 4. The last issue to be decided in this appeal for A.Y.2013-14 is with regard to disallowance made u/s.14A of the Act r.w.r. 8D of the Rules. 4.1 We have heard rival submissions and perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Rule 8D(2) of the Rules would come into operation. He also placed reliance on the decision of the Hon'ble Apex Court in the case of Godrej & Boyce Manufacturing Company Limited reported in 394 ITR 449 among other decisions. In this regard, we find that the ld. AO had specifically gone into the various expenditure heads that were debited in the profit and loss account and had arrived at an objective satisfaction that the various expenses thereon are common in nature and assessee though had debited certain expenditure in the profit and loss account and also had not debited any expenditure in its capital account to be attributable for the purpose of investments, the expenditure debited thereon becomes indivisible in nature and accordingly, in order to fulfil the intention behind introduction of provisions of Section 14A of the Act, the computation mechanism of Rule 8D(2) of the Rules would automatically come into operation. We find lot of force in the said argument of the ld. DR before us. From the perusal of the capital account of the assessee enclosed in page 11 of the paper book, we find no expenses attributable to investment activity have been debited by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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