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TMI Blog2021 (8) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2013-14. Since, facts are identical and issues are common, for the sake of convenience, appeals filed by the assessee as well as Revenue were heard together and are being disposed off by this consolidated order. 2. The assessee has raised the following grounds of appeal:- "1.The order of the Hon'ble Commissioner of Income Tax (Appeal) is against facts and circumstances of the case. Both the Learned Assessing Officer and the CIT (A) has failed to appreciate the various submissions made in the current perspective. 1. Disallowance under section 14A r.w.Rule 8D - Rs. 1,39,49,985/-: The Commissioner of Income Tax has not justified in disallowing a sum of Rs. 1,39,49,985/-. The Appellant submits that Interest expenditure of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable cause as provided under the Act for condonation of delay and hence, delay in filing of appeal is condoned and appeal filed by the assessee is admitted for adjudication. 6. Brief facts of the case are that the assessee company is engaged in providing logistic service filed its return of income for the assessment year 2013-14 on 29.11.2013 declaring total income of Rs. 1,75,71,40,470/-. The case was taken up for scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that the assessee has earned huge exempt income, however, did not make suo-moto disallowance of any expenditure in relation to said exempt income and hence, called upon the assessee to explain as to why disallowances contemplated under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law that only interest paid on loans which has been used for acquiring tax free income can be considered for disallowance u/s.14A of the Act. 8. The learned CIT(A), after considering relevant submissions of the assessee and also by following decision of the Hon'ble Jurisdictional High Court of Madras in TCA No.2520 of 2016 dated 23.12.2016 in the case of M/s. Redington India Ltd. Vs. Addl.CIT (2016) 97 CCH 219 (Mad) has restricted disallowance computed by the Assessing Officer u/s.14A r.w. Rule 8D to the extent of exempt income of Rs. 1,39,49,985/-. Being aggrieved by the learned CIT(A) order, the assessee as well as Revenue are in appeal before us. 9. The learned AR for the assessee, at the time of hearing, submitted that appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted u/s.14A of the Act to the extent of exempt income by following decision of the Hon'ble Jurisdictional High Court of Madras in TCA No.520 of 2016 dated 23.12.2016 in the case of M/s. Redington India Ltd. Vs. Addl. CIT, therefore, there is no merit in the arguments of the assessee that Assessing Officer has wrongly computed interest expenses and other expenses by including investments in overseas subsidiaries. However, he fairly agreed that issue may be set aside to the file of Assessing Officer to re-verify claim of the assessee in light of computation filed by the assessee. 11. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. It is stated before us that the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 14A of the Act is applicable. In fact, it is not a case of the assessee that provisions of section 14A of the Act has no application. The grievance of the assessee is that disallowance computed by the Assessing Officer under section 14A of the Act is excessive, when it compared to dividend income earned for the year. The assessee has submitted that while computing disallowance the Assessing Officer has considered interest expenses, which is not relatable to exempt income on the ground that those interest expenses are paid on loans which are borrowed for specific purposes. The assessee further claimed that while computing other expenses, the Assessing Officer has considered investments in overseas subsidiaries, income from which is taxa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce u/s.14A r.w. Rule 8D of the Income Tax Rules, 1962. The said computation was not available to the Assessing Officer at the time of assessment proceedings. Therefore, we are of the considered view that the issue needs to go back to the file of the Assessing Officer for re-consideration in light of revised working filed by the assessee. Hence, we set aside the appeal to the file of Assessing Officer and direct him to recompute disallowance of expenses relatable to exempt income u/s.14A of the Act in accordance with our directions given herein above. 14. In the result, appeal filed by the assessee is treated as allowed for statistical purposes and appeal filed by the Revenue is dismissed as not maintainable. Order pronounced in the open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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