9911796707
TMI Blog2021 (4) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961 [in short, 'the Act']. Heard both the parties. Case file perused. 2. Coming to the A.Y 2010-11 involving ITA No.1080/Hyd/2019, we find that the Revenue solitary substantive grievance challenging correctness of the CIT (A)'s action restricting the Assessing Officer's action making section 14A r.w. Rule 8D disallowance of Rs. 3,13,31,370/- involving alleged direct and administrative expenses of Rs. 2,81,01,260 and 32,30,110/- respectively only to the extent of the corresponding investments yielding the exempt income. The CIT (A)'s detailed discussion to this effect reads as under: "6.2 During the course of appeal proceedings, with regard to the above ground, the appellant submits as under: "The company received dividend income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d exempt income is considered for the disallowance u/s.14A. Appellant already disallowed Rs. 11,09,716/- u/s.14A in its computation of income. Therefore, the Assessing Officer is directed to consider the disallowance u/s.14A made by the appellant and recalculate the same by keeping in view of the above caselaws". 3. We have heard rival argument against and in support of the CIT (A)'s impugned directions. We notice that he has followed the tribunal's order in assessee's case itself for A.Y 2013- 14 (Supra) that only exempt income yielding investments deserve to be considered for the purpose of Rule 8D disallowance computation. The Revenue is equally fair in its substantive ground in not pinpointing any distinction on facts or law in these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be made on the total investment. It is pertinent to refer to the following case laws which deals with the same issue: a) Hyderabad Tribunal's order in the case of Srinivasa Cystine Pvt Ltd Vs. ITO, in ITA No.1846/Hyd/2014 dated 18.01.2017, wherein the decision was held as "it is only the investments which yield tax free income that has to be considered for applying the formula prescribed under rule 80(2)(iii). Similar view was also taken by this Bench in other cases also. Considering this view, we direct the AO to consider only the investments, which yielded the exempt income in the formula under rule 80(2)(iii) and accordingly, disallow the expenses relating to exempt income. " b) Hon'ble Delhi Tribunal's order in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gust 07, 2018 passed by the Learned Commissioner of Income-tax (Appeals) -1 ('CIT(A)'), in respect of the captioned year. 1. Background During the captioned year, the Company earned exempt income in the nature of dividend of Rs. 10,91,280/-. During the time of filing of return of income, the Company suo-moto made disallowance of Rs. 23,23,699/- as per the provisions of section 14A read with Rule 8D of the Income-tax Rules, 1962 ('IT Rules'). In this regard, the learned assessing officer (' AO') had made disallowance u/s 14A read with Rule 8D of the IT Rules of Rs. 1,92,70,574/- under normal provisions and also under section ('u/s') 115JB of the Income-tax Act, 1961 ('the Act'). Against this, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86 (SC)], wherein the SLP filed by the tax authorities against the judgement of the Hon'ble Delhi High Court lI2018j 99 taxmann.com 285 (Haryana)] was dismissed which held that the 14A disallowance cannot exceed the exempt Income. 3. Hon'ble Bombay High Court, in the case of Principal Commissioner of Income-tax-3 vs. Reliance Ports and Terminals Ltd.lI2020j 114 taxmann.com 529 [Bombay] 4. Hon'ble Jurisdictional Tribunal in the case of Mylan Laboratories Ltd. v. Deputy Commissioner of Income-tax, Circle-16(2), Hyderabad lI2020j 113 taxmann.com 6 (Hyderabad - Trib)] Therefore, the respondent is filing an application under Rule 27 of the Tribunal rules in order to plead for restricting the disallowance under section l4A to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onors to kindly consider our application under Rule 27 of the Rules, on the additional issues, while disposing of the Department's appeal". 6. We have given our thoughtful consideration to rival pleadings in Revenue's main appeal as well as assessee's Rule 27m petition. We find no merit in Revenue's stand since the CIT (A)'s has directed to identify only the exempt income yielding interest in tune with AYs 2013-14 and 2010-11. Its appeal ITA 2116/Hyd/2018 is rejected therefore. 7. We next advert to assessee's rule 27 petition. Its formal plea seeking to restrict sec 14A read with rule 8 disallowance (supra) to the extent of exempt income and other facts deserve to be declined since the CIT (A)'s has not decided the same against its st ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
