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TMI Blog2020 (6) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... g the value of investments with the available own funds. We notice that the value of investments held by the assessee as at the year end is ₹ 1,444.46 crores, whereas the own funds available with the assessee was ₹ 585.21 crores only. Hence, it cannot be said that the own funds available with the assessee was more than the value of investments. Hence, this argument of the assessee also fails on the above said facts. Share income from partnership firm should not be considered as exempt income, since the profits of partnership firm have already suffered tax in the hands of the partnership firm - We notice that the very same issue was considered by Ahmedabad Special bench of ITAT in the case of Shri Vishnu Anand Mahajan [ 2012 (6) TMI 297 - ITAT, AHMEDABAD] and identical contentions made by the assessee were rejected by holding that, once the share income is excluded from the total income u/s 10(2A) of the Act, the provisions of section 14A of the Act would apply to it. Hence, this contention of the assessee would fail. Assessee is a partner in many firms - We do not find any merit in this contention of the assessee, since what is exempted under the Act is share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year. 6. The learned CIT(A) ought to have appreciated that the appellant had sufficient funds of its own, thereby making the disallowance u/s 14A r.w. Rule 8D unwarranted. 7. The learned CIT(A) further, failed to appreciate that the disallowance made in much more than the exempt income. 8. Without prejudice, the disallowance is excessive, arbitrary, unreasonable and ought to be deleted. 9. For these and other grounds that may be urged at the time of haring of the appeal, the Appellant prays that the appeal may be allowed. 2. All the grounds urged by the assessee are directed against the disallowance made u/s 14A of the Act. The facts relating thereto are discussed in brief. The assessee is a real estate developer. During the year under consideration, the assessee has received following income, which were claimed as exempt: a) Share of profit from partnership firm ₹ 1,02,01,474/- b) Dividend from mutual funds - ₹ 2,04,183/- Total exempt income ₹ 1,04,05,657/- The assessee did not make any disallowance u/s 14A o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance made by the A.O. Aggrieved, the assessee has filed this appeal before us. 6. We have heard the rival contentions and perused the records. The ground nos. 1, 2, 3, 5, 8 and 9 are general in nature. Ground no.4 is related to non-recording of dissatisfaction. As rightly pointed out that the Ld CIT(A), we notice that the AO has issued show cause notice to the assessee on due examination of financial statements of the assessee, since the assessee did not make any disallowance u/s 14A of the Act, even though it had earned exempt income. Hence the dissatisfaction of the AO has been demonstrated in the assessment order and it is not a case of mechanical invoking of provisions of Rule 8D. Accordingly we reject ground no.4 of the assessee. 7. In ground no.6, the assessee is contending that the assessee has got sufficient own funds and hence disallowance u/s 14A is not warranted. Before us, the Ld. A.R. submitted that the own funds available with the assessee is in excess of the value of investment made in shares and hence the A.O. should not have disallowed any expenditure out of interest expenses under Rule 8D(2)(ii) of I T Rules. In this connection, Ld. A.R. invited our attenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not find any merit in this contention of the assessee, since what is exempted under the Act is share income received from the partnership firm u/s 10(2A) of the Act, meaning thereby, the profit or loss received from the partnership firm does not enter into computation of income at all. Hence the question of setting off income from partnership firm inter se does not arise. Accordingly, once a particular income does not enter into the computation on the ground the same is exempt, as held by special bench in the case of Sri Vishnu Anand Mahajan (supra), provisions of section 14A of the Act would apply. In this case, there is no dispute that the share income from partnership firm to the tune of ₹ 1,02,01,474/- has been claimed as exempt u/s 10(2A) of the Act. Hence the provisions of sec.14A shall apply to the above said exempt income. 10. In ground no.7, the assessee is contending that the disallowance made by the tax authorities u/s 14A of the Act is much more than exempt income. Before us, the Ld. A.R. submitted that the quantum of disallowance u/s 14A of the Act should not exceed the amount of exempt income. In support of this proposition, the Ld. A.R. placed reliance o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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