9911796707
TMI Blog2021 (2) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... PSU is in the business of development of industrial infrastructure in the state of AP. The assessee filed its original return of income on 27/09/2013 admitting taxable income of Rs. 10,30,69,890/- under normal provisions and book profits at Rs. 27,76,57,693/-. Subsequently, the assessee filed revised return of income on 30/03/2015 admitting a taxable income of Rs. 25,17,56,000/-, which was processed u/s. 143(3) of IT Act. Subsequently, the case was selected for scrutiny under CASS and accordingly statutory notices were issued to the assessee, against which, the ld. AR of the assessee filed the information as called for. 2.1. During the course of assessment proceedings, the AO noticed that the assessee has claimed exempt income of Rs. 16,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is correct. 6. After hearing both the parties and perusing the material on record as well as going through the orders of revenue authorities, we observe that Rule 8D(2)(iii) is clear that disallowance should be made under the said rule on those investments, on which the assessee earns exempt income, but, not on the entire investments. In this connection, we refer to the decision in the case of Transport Corporation of India Ltd. in ITA No. 117/Hyd/2016 vide order dated 21st September, 2016, wherein the coordinate bench of this Tribunal has held as under: "11.1 While carefully reading the rule 8D(2)(ii), the formula given are: A X B/C Where A = amount of expenditure by way of interest other than the amount of interest included in cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age investments from which the exempt income is received should be considered instead of average of the total investments. 11.3 considering the above discussion, we direct the AO to recalculate the disallowance as per rule 8D as per the above guidance. Accordingly, ground raised by assessee is allowed." As the issue under consideration is materially identical to that of the said case, following the conclusions drawn therein we direct the AO to recalculate the disallowance as per rule 8D as per the guidelines given as above in the case of Transport Corporation of India and calculate the disallowance of expenditure under rule 8D(2)(iii) taking the average investment from which the exempt income is received." Following the above decision, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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