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TMI Blog2021 (4) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... - ITA No. 5148/Mum/2019 (A.Y: 2015-16) - - - Dated:- 16-2-2021 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER Appellant by: Shri Brajendra Kumar, DR Respondent by: Shri Ketan Ved, AR ORDER PER PAVAN KUMAR GADALE: The revenue has filed the appeal against the order of the Commissioner of Income Tax (Appeals) - 2, Mumbai, passed u/s.143 (3) and 250 of the Income Tax Act, 1961. 2. The revenue has raised the following ground of appeal:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in directing to exclude investment which was not yielded exempt income without appreciating the fact that no such exclusion is provided under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to recompute the disallowance under rule 8D(2)(ii) and 8D(2) (iii) of the Act and partly allowed the appeal of the assessee. 5. Aggrieved by the CIT(A) order, the revenue has filed the appeal with the Hon ble Tribunal. At the time of hearing, the Ld. DR of the revenue submitted that the CIT (Appeal) has erred in directing the AO to exclude investments which is not yielding exempted income as there are no excluding provisions, while calculating under rule 8D (2) (ii) and 8D(2) (iii) and prayed for restoration of computation of the A.O. Contra, the Ld.AR supported the order of the Ld.CIT(A) and the assessee s own case for the earlier assessment year on similar and identical issues and prayed for dismissal of the revenue appeal. 6. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxmann.com 415 (Delhi Trib.) Before going further we deemed it necessary to advert the finding of the CIT(A) on record: - 3.5 I have considered the AO s order as well as appellant submission in aforesaid matter. The AR of the appellant vehemently argues that the appellant company has not received any dividend income from the trade investments and therefore section 14A cannot be applicable in the appellant s case. I have gone through the other income break-up figure as per Schedule-12 as on 31.03.2011 which is as under: Schedule 12: Other Income Dividend on current investments (non-trade) ₹ 118.17 Diminution in value of current investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the view that the CIT(A) has decided the matter of controversy judiciously and incorrectly which is not liable to be interfere with at this stage. Accordingly, this issue is being decided in favour of the assessee against the revenue. 8. In the result, the appeal filed by the revenue is hereby ordered to be dismissed. 7. We have considered the facts and circumstances of the present case, where the Ld. CIT (A) has relied on the judicial decisions, the Income Tax rules and the provisions of Act and observed at page 24 para 5.2 and 5.3 of the order read as under:- 5.2 The second ground is against disallowance of ₹ 22,246,935/- under Rule 8D(2)(ii) of the I.T. Rules. The appellant has submitted that it had suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the disallowance under Rule 8D(2)(ii) with respect to the above said amount of interest expenditure of ₹ 858,26, 147/-. However, the average investment to be considered for computing the disallowance under Rule 8D(ii) (iii) is discussed in para below. 5.3 In Ground No.3, the appellant has contested the computation of average investment to be considered for making disallowance under Rule 8D(ii) (iii). I am inclined to agree with the appellant that investment in foreign subsidiaries and investment in debentures should be excluded from the computation of average investment since these investment yield income which are taxable under Income tax Act. Further, I am inclined to agree with the appellant that only those investments, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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