9911796707
TMI Blog2021 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (hereinafter referred to as Act) dated 25/02/2016 by the ld. Dy. Commissioner of Income Tax - 14(1)(1), Mumbai (hereinafter referred to as ld. AO). 2. The only issue involved in these cross appeals is with regard to disallowance made u/s 14A of the Act read with Rule 8D(2) of the Income Tax Rules. 3. We have heard the rival submissions and perused the materials available on record. At the outset, the ld DR sought for an adjournment on the ground that he requires some time to go through these files. As the issue involved in both the appeals is only disallowance made under section 14A of the Act read with Rule 8D(2) of the Rules, these items were passed over and sufficient time was given to ld DR to go through the same. Later it was take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave considered the facts of the case and the appellant's submissions. As far as disallowances under Rule 8D(2)(i) and Rule 8D(2)(iii) are concerned, the suo moto disallowances made by the appellant and the disallowances computed by the Assessing Officer are the same and are not being disputed. In respect of proportionate interest under Rule 8D(2)(ii), the Assessing Officer has computed the disallowance at Rs. 3,00,91,762/- as against the appellant's suo moto disallowance of Rs. 7,35,564/-. Perusal of the appellant's financials shows the Share Capital and Reserves GBP Surplus as at beginning and close of the year were 1399,58,32,019/- and Rs. 1364,29,37,801/-respectively. The total of non-current investments and current investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y made by the assessee in the return) under second limb of Rule 8D(2) of the Rules; even if it is to be made, on without prejudice basis, only the net interest (i.e interest paid less interest income) should be considered for such disallowance and that only those investments which had actually yielded exempt income should be considered for working out the disallowance under second and third limb of Rule 8D(2) of the Rules. 8. We find that there is a categorical finding recorded by the ld CITA that the assessee is having sufficient own funds in the form of share capital and reserves and surplus at the beginning and close of the year at Rs. 1399,58,32,019/- and Rs. 1364,29,37,801/- respectively, as against the total of non-current investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,762/- which also includes the disallowance voluntarily made by the assessee in the return to the extent of Rs. 7,35,564/-. This is in view of the fact that once sufficient own funds are available with the assessee for making investments, then there cannot be any disallowance of interest under second limb of Rule 8D(2) of the Rules, eventhough the same was erroneously made by the assessee in the return of income. We are conscious of the fact that this direction may eventually go to reduce the returned income of the assessee and in that regard, we hold that the revenue is authorised to collect taxes in accordance with law as per Article 265 of the Constitution of India and not based on the consent or acceptance of the assessee either in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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