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TMI Blog2024 (12) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... by coordinate bench of this Tribunal as well as Hon'ble High Court in assessee s own case. - Smt. Beena Pillai, Judicial Member And Shri Prabhash Shankar, Accountant Member For the Assessee : Shri Madhur Agrawal Fenil Bhatt For the Revenue : Shri R. R. Makwana, Sr. D.R. ORDER PER BEENA PILLAI, JM: Present appeal filed by the assessee arises out of order dated 28/06/2024 passed by NFAC Delhi/ Ld. CIT(A) for assessment year 2017-18 on following grounds of appeal: 1 (a) On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) has erred in upholding the disallowance made by the learned Assessing Officer by applying the provisions of section 14A read with Rule 8D of the Act. b) On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the appellant has disallowed expenditure of Rs. 4,53,034/- u/s 14A on proportionate basis which is reasonable as held by the Hon'ble ITAT 'D' Bench in Appeal No. ITA 7623/Mum/2011 dt. 22/01/2014 in the appellant's own case for A.Y. 2008-09 as well as the subsequent AY 's on an identical issue and jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total expenditure. i) Without prejudice to the above, on the facts and circumstances of the case as well as in law, the Learned Commissioner of Income Tax (Appeals) has erred in holding that the action of the A.O. is upheld on account of disallowance u/s. 14A of Rs. 9,79,36,392/- determined as per rule 8D, while computing the Book Profit u/s. 115JB of the Income Tax Act, without appreciating the fact that rule 8D applies only to section 14A and not to section 115JB of the Income Tax Act. 2. The appellant prays for leave to add to or delete or amend any of the grounds of appeal. 3. Each of the above ground of appeal is independent of the others and without prejudice to the other grounds of appeal. 4. The appellant prays that:- the reasonable method of apportioning the expenditure inadmissible under section 14A as determined by the appellant be accepted and that the additional disallowance of Rs. 9,79,36,392/- under section 14A read with Rule 8D be deleted. without prejudice to what is stated above, that the disallowance u/s 14A applies only to section 14A and not to section 115JB and be deleted to modify the assessment in accordance with the provisions of law. Brief facts of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition made in respect of the business loans advanced by the assessee. However, on the issue of disallowance u/s. 14A r.w.r.8D of the Act, the Ld. CIT(A) observed and held as under:- 6.3. During the year, appellant had earned Rs. 4,55,75,508/- as exempt dividend, long term capital gain exempt u/s 10(38) of the Act of Rs. 10,73,18,111/-, exempt distribution income from venture capital fund of Rs. 4,25,29,575/- and interest on tax- free bonds of Rs. 1,58,93,060/- resulting in total exempt income of Rs. 21,13,16,254/-. 6.4. Appellant had suo-moto disallowed Rs. 4,53,034/- in the computation of income u/s 14A of the I.T. Act. From the audited financials of F.Y. 2016-17 it was seen that the appellant had quoted bonds of Rs. 19,91,64,000/-, equity shares of Rs. 22,87,07,789/-, investment in subsidiaries of Rs. 5,62,31,454/-, JV Investment of Rs. 27,11,25,000/-, Investment in associates of Rs. 44,10,39,146/-, preference shares of Rs. 69,06,025/-, other equity shares of Rs. 5,12,30,792/-, Mutual Funds of Rs. 368,98,35,980/- and Venture Capital and Investment Funds of Rs. 25,33,47,857/- as non-current investments and unquoted mutual funds of Rs. 4,70,23,15,876/- as current investments as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Particulars Rs. Electricity Expenses 2,01,998 Auditor's Remuneration 6,21,320 Security charges 11,649 Vehicle Expenses 94,119 CSGL Charges 16,737 Compensation for office expenses 19,00,113 Demat charges 52,695 Profession Tax 2,500 S.T.T. 90,799 Legal Professional fees 20,62,994 Donation 10,50,00,000 Property, Plant and Equipments Written off 16,18,963 Miscellaneous Expenses 1,49,631 Rates Taxes 62,445 Total Expenditure 11,18,85,962 4.2. The Ld.AR submitted that out of the above expenditure, assessee while computing taxable income has already added back the following:- Rs. Donation 10,50,00,000 Property, Plant and Equipments written off 16,18,963 10,66,18,963 Amount inadmissible u/s 14A 4,53,034 Total Disallowance 10,70,71,997 4.3. The Ld.AR submitted that, while computing the disallowance u/s. 14A, the assessee took into consideration the direct expenditure of Rs. 1,43,493/- incurred in realization to earning of exempt income. Further he submitted that in respect of every indirect expenses, the assessee apportioned all other expenses in ratio of exempt income to total income that was computed at Rs. 3,09,541/-. He submitted that, the assessee has been following similar method ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s agitated against 2 additional disallowance of an amount of Rs. 3,49,64,447/- u/s 14A read with Rule 8D. In para 5 of the assessment order the Ld. AO had mentioned that the assessee company had claimed exempt income amounting to Rs. 4,28,42,975/- against which the appellant had suo- moto disallowed a sum of Rs. 5,72,785/- as expenditure u/s 14A read with Rule 8D. Since the appellant had earned exempt income and according to the Ld. AO the assessee company did not maintained separate accounts for investments, therefore, he applied the provisions of Section 14A read with Rule 8D and worked out a disallowance of Rs. 3,55,37,232/-. After giving credit of disallowance made by the appellant itself for an amount of Rs. 5,72,785/- the net disallowance made by the AO comes to Rs. 3,49,64,447/-. During the course of appellate proceedings, a written submission was filed which find place in para 5 of this order. The appellant submitted that similar type of disallowances were made in appellant's own case for assessment years 2008-09,2009-10. 2010-11, 2011-12 and 2012-13. According to the appellant, the appeal of the assessee on these grounds has been decided by Hon'ble Tribunal. I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2012-13, in ITA No. 1159/MUM/2017 dated 25.07.2018 9- Upon further appeal, the Id. CIT(A) has restricted the same to Rs. 6.48 lacs on similar reasoning and by placing reliance on the stand of this Tribunal for earlier years. 10-Facts being identical, taking the same stand, we confirm the action of Id. CIT(A). Since there is neither any legal change nor any factual change therefore, respectfully following judgement of Hon'ble ITAT in appellant's own case for assessment year 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, AD is directed to work out the disallowance a per the criteria decided by Hon'ble ITAT in appellant's own case in earlier years. Hence appeal is partly allowed. 5.2. This Tribunal for A.Y. 2014-15 considering the observation of the Ld. CIT(A) observed as under:- 5. On appraisal of the above mentioned order, we find that the claim of the assessee was allowed on the basis of the decision of the Hon'ble ITAT in the assessee's own case for the A. .2008-09, 2009-10, 2010-11, 2011-12 2012-13. The details of decisions have been mentioned in the order reproduced above. There is no factual change. The issue has already been allowed by the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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