TMI Blog2018 (5) TMI 1942X X X X Extracts X X X X X X X X Extracts X X X X ..... restricted the AO to re compute the administrative expenses to the extent of ₹ 118.17 lacs which was the investment to earn the dividend income. In this regard, the matter of controversy has been adjudicated in the case of ACIT, Circle 17(1) New Delhi Vs. Vireet Investment P. Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] in which it specifically held that only those investment are liable to be considered for computing average value of investment which yielded exempt income during the year. In view of the said circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and incorrectly which is not liable to be interfere with at this stage. Accordingly, this issue is being decided in favour of the assessee against the revenue. - I.T.A. No.1945/Mum/2016 - - - Dated:- 23-5-2018 - SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH, JM For The Revenue : Shri Ram Tiwari (Sr. AR) For The Assessee : Shri Ketan Ved ORDER PER AMARJIT SINGH, JM: The revenue has filed the present appeal against the order dated 22.12.2015 passed by the Commissioner of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of u/s 14A r. w. Rule 8D of the Act. Feeling aggrieved, the revenue has filed the present appeal before us. ISSUE NO. 1 4. Before discussing the present issue, it is necessary to consider the application for condonation of delay. The appeal has been filed 7 days delay which is not so long. The appeal is required to be decided on merits in the interest of justice, therefore, we condone the delay. Under this issue, the contention of the revenue is that the CIT(A) is not correct in no considering the interest portion of ₹ 6,32,96,027/- in computing to disallowance u/s 14A r.w. Rule 8D 2 (ii) of the Act. It is necessary to advert the finding of the CIT(A) on record: - 3.4, I have considered the AG's order as well as appellant's submission in this regard. The appellant has provided year wise details of the investment made and the statement of own funds. As appellant had sufficient funds in the year in which investment were made, the investment would be consider as being made out of own funds. 1 have also gone through the Balance Sheet as on 31.03.2011 wherein the own funds available with the appellant is as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Non-trade investmets 40.03 0.03 20.03 Misc.Investment 3.24 - 1.62 Investment in Government Securities 0.48 0.48 0.48 The appellants submission on the same are as under: Investment in subsidiary company 5.3 It is submitted that no dividend has been received by the appellant from any of its subsidiary company during the aforesaid assessment year. As no exempt income is earned therefrom, the same cannot be considered for the purpose of computing the disallowance u/s 14A of the Act. 5.4 Reliance in this connection is placed on the decision of Bombay High Court in the case of CIT(A) V. Delite Enterprise (Income Tax appeal No. 110 of 2009) (Refer pages 397 to 398), wherein the Hon ble High Court have upheld the decision of the Hon ble Mumbai Tribunal and held that since no exempt income was earned, there should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) (Refer pages 362 to 370) 5. On appraisal of the above mentioned finding, we noticed that the appellant has own fund more than investment. The capital and reserves fund was to the tune of ₹ 26,433.77 lacs. The investment was to the tune of ₹ 9,453.07/- lacs. In view of law settled in Reliance Utilities Power Ltd. (313) ITR 340) and HDFC Bank Ltd. (366 ITR 505) investment portion was not liable to be considered in computing the disallowance u/s 14A r.w. Rule 8D of the I.T. Act. The matter of controversy has rightly been adjudicated by the CIT(A) . Facts are not distinguishable at this stage also. No distinguishable material has been produced before us. In view of the said circumstances, we are of the view that the CIT(A) has rightly adjudicated the matter of controversy on this issue, therefore, we found no ground to be interfere with in this issue. Accordingly, this issue is decided in favour of the assessee against the revenue. ISSUE NO. 2 6. Under this issue the revenue has challenged the restriction of disallowance made u/s 14A of the Act r.w. Rule 8D of the Rules to the extent of dividend income from non-trad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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