9911796707
TMI Blog2023 (4) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. PCIT is incorrect and therefore, the assessment order cannot held to be erroneous, in so far as prejudicial to the interest of revenue. Now, whether the disallowance made by the AO is correct or it is excessive the same is already subject matter of first appeal and therefore, we are not going into this aspects. However, in so far as observation and the finding of the Ld. PCIT in setting aside to the issue of disallowance to the AO is quashed and accordingly, appeal of the Assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 20,71,38,73/- which was claimed was exempt u/s 10(15) of the Act. He noted that, Assessee has made investment of Rs. 265,03,46,102/- as on 31.03.2017 in the tax free bonds, and assessee has not made any disallowance u/s 14A. The Assessee's contention before the AO was that, it has not claimed any deduction of any expenses that might have being incurred for earning exempt income. Therefore, no disallowance was offered u/s 14A. It was further contended that being a mutual association, the 'principle of mutuality' will apply and this has been accepted by the Tribunal in Assessee's own case for several assessment years. However, the Ld. AO held that disallowance u/s 14A is required to be made and accordingly proceeded to apply rule 8D and disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for earning of the exempt income. Apart from that, it was stated that only those investments can be taken for the purpose of disallowance which has yielded income and only the tax free bonds have yielded exempt income. 5. However, the Ld. PCIT rejected the Assessee's contention and set aside the assessment after observing and holding as under: 5. I have carefully considered the submissions made by the assessee and have also gone through the facts of the case. I have also perused the relevant assessment records. On perusal of the records it is seen that, during the year the assessee has earned interest on Tax Free Bonds of Rs.20,71,38,733/- which is claimed as exempt u/s. 10(15) of the Income Tax Act, 1961. It is also seen that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered during the year, i.e., on the quoted mutual fund units. This is evident from computation of income, the copy of which has been placed in the paper book. Thus, the entire presumption of Ld. PCIT is incorrect. In any case, in so far as the quantum of disallowance made by the AO, Assessee is already in appeal before the first appeal and the very basis on which the AO has disallowance is unsustainable in law. 6. Before us, The Ld. CIT DR strongly relied upon the order of the PCIT and submitted that AO has not examine the entire investment, whether any such investment has yielded exempt income or not and were subjected to tax under the head capital gain. Therefore, this matter needs be examine by the AO. 6. After considering the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
