9911796707
TMI Blog2022 (2) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... considered for computing the average value of investment u/s. 14A r.w.r. 8D of the Income-tax Rules, 1962. Hon ble Delhi High Court in the case of ACB India Ltd. vs. ACIT [ 2015 (4) TMI 224 - DELHI HIGH COURT ] has held that for the purpose of provisions of section 14A, instead of taking into account the total investment, the investment attributable to dividend was required to be adopted and, thereafter, the disallowance was to be arrived at. We, therefore, deem it proper to restore the issue to the file of the AO with a direction to recompute the disallowance u/s. 14A r.w.r. 8D by considering the investments which has actually yielded dividend income and decide the issue as per fact and law, after giving due opportunity of being heard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs & determination: The singular issue in the appeal is with reference to disallowance of ₹ 12,51,461/- of invoking section 14A r.w.r. 8D. The computation given by the AO for the purpose of disallowance is as under:- Total loss declared by the assessee 3,30,19,180 Addition/disallowances (as discussed above) 1. Disallowance u/sl4A of the Act - 12,51,461 12,51,461 Total loss 3,17,67,719 Rounded off 3,17,67,720 4.2 The appellant has stated that while making the disallowance the opening balance of investment has been taken as ₹ 22,62,37,201/- and is the closing balance of investment has been taken at ₹ 27,43,47,139/-. On this opening and closing balance the disallowance has been worked out. In his submissions, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oisting period of 2nd of April to 30th of March of any financial year. The same has been amended and in fact in any subsequent years this problem of investment only being held during the year would also be utilized in computation of the disallowance. There is no direct case wherein it is stated or held that the disallowance could not be made where exempt income was received by the appellant on the asset per se was not existing at the end of the year. The specific assets which yielded exempt income were not there at the end of the fiscal but equivalent investments in different scrips were available. Therefore once the mechanism for computation of disallowance has been laid down, a disallowance is necessary if there is exempt income. Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 14A would apply to dividend income on which tax is payable u/s. 115O of the IT Act. He submitted that the assessee, in the instant case, has given reasons as to why the provisions of section 14A r.w.r. 8D should not be applied. Therefore, the order of the CIT(A) being not in accordance with the law, should be set aside and the grounds raised by the assessee should be allowed. 7. Alternatively, the ld. Counsel for the assessee submitted that the assessee has received dividend income in respect of only one scrip and the average investment on such scrip comes to ₹ 55,17,694/-, therefore, disallowance under Rule 8D(2)(iii) being 0.5% of the average investment comes to ₹ 27,588/- only and, therefore, he has no o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the average value of investment u/s. 14A r.w.r. 8D of the Income-tax Rules, 1962. 10. We find, the Hon'ble Delhi High Court in the case of ACB India Ltd. vs. ACIT, reported in 374 ITR 108 has held that for the purpose of provisions of section 14A, instead of taking into account the total investment, the investment attributable to dividend was required to be adopted and, thereafter, the disallowance was to be arrived at. We, therefore, deem it proper to restore the issue to the file of the AO with a direction to recompute the disallowance u/s. 14A r.w.r. 8D by considering the investments which has actually yielded dividend income and decide the issue as per fact and law, after giving due opportunity of being heard to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
