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TMI Blog2016 (8) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... , thus no disallowance can be made u/s 14A. In the present case as per the working of the average value of tax free investment under rule 8D submitted by the assessee, the assessee had made investment of ₹ 13,73,00,000/-. Assessing Officer should not have included the share application money while working out the average value of investment under Rule 8D. Therefore, the Ld. CIT(A) has rightly issued the direction to the A.O to exclude share application money of ₹ 13,73,00,000/- for the purpose of computation of disallowance of u/s 14A. - ITA No.162/Mum/2015 - - - Dated:- 24-8-2016 - Shri Rajendra, AM And Shri Ram Lal Negi, JM Revenue by: Shri. O.P. Meena Assessee by: Shri. Deepak Tikekar ORDER Ram La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciating the fact that the said investment would result in exempt incomes which may arise in future, however the expenditure pertaining to the said investments is debited to the P L account during the F.Y. 4. Before us the Ld. Departmental Representative (DR) submitted that the Ld. CIT(A) has passing the impugned order without appreciating the fact that the investment of ₹ 13,73,00,000/- made by the assessee would result in exempt incomes which may arise in future. Moreover the assessee has debited expenditure pertaining to the said investments is in P L account during the financial year. Hence, the order of the Ld. CIT(A) is liable to the set aside. 5. On the other hand the learned Authorized Representative (AR) submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earning any income out of investment, Assessing Officer was not justified in invoking provisions of section 14A, read with Rule 8D in order to disallow a part of incidental dividend income earned on said investment. Similarly in Rainy Investments Pvt. Ltd. vs. ACIT(supra) the Coordinate bench has held that share application money cannot be regarded as an investment in shares, or an asset yielding tax-free income, and neither is it capable of yielding any tax-free income, thus no disallowance can be made u/s 14A. In the present case as per the working of the average value of tax free investment under rule 8D submitted by the assessee, the assessee had made investment of ₹ 13,73,00,000/-. In view of the decision rendered by the Kolkatta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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