TMI Blog2011 (1) TMI 1572X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of non taxable income earned by the Appellant from profit on sale/redemption of investments. Ground no. 2 The learned CIT(A) has erred in computing disallowance under section 14A of ₹ 228,073,014 against profit from sale/redemption of investments of ₹ 35,920,365 held as non taxable on various grounds including the following grounds: i. The learned CIT(A) has erred in considering all the expenses recorded in the financial statements of the Appellant under the head Operating expenses related to insurance business as expenses which need to be apportioned between taxable insurance income and non taxable income from profit on sale/redemption of investment. ii. The learned CIT(A) has erred in ignori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat none of the citations in the submissions of the Appellant are directly in relevance to section 14A and in concluding that no specific plausible reason is offered by the assessee for not working out the disallowance under Section 14A of the Act. ix. ix. The learned CIT(A) has erred in ignoring the Appellant's submissions that the learned Assessing Officer (' AO') has erred in concluding that head-wise income and expenditure accounts and sources of funds have not been maintained by the Appellant. Ground no. 3 The learned CIT(A) has erred in confirming levy of interest under sections 234B and 234C of the Act in respect of difference in returned income arising on account of order of Insurance. Regulatory an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of service charges which was ₹ 23,81,85,483/-. It was stated that this figure is substituted then the entire approach of the amount of disallowance should get altered. We find force in this argument. Since the grievance related to the ascertainment of certain figures of expenses; as appeared in the books of accounts, therefore we can take the recourse of directing the ld. CIT(A) to verify the same and if found correct must rectify this mistake, however it is also pertinent to observe at this juncture that this direction of ours shall not prejudice in any manner the main grievance of the assessee about the applicability of the provisions of sec. 14A of I.T. Act in the present situation. 3. This view has been followed by a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he point of disallowance u/s 14A as discussed above. 4. Ground No. 3 relates to levy of interest u/s 234B and 234C in respect of difference in returned income arising on account of order dated 22-11-2002 issued by Insurance Regulatory and Development Authority of India (IRDA) (which is the governing body for insurance companies). The learned AR submitted that similar matter is sub-judice before the Hon ble jurisdictional High Court wherein the matter was taken by way of a writ petition and the learned AR was fair enough to submit that the matter may be restored to the file of the A.O to decide in the light of final outcome of writ claimed to be sub-judice, as per law available at the relevant point of time. The learned DR did not disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive applicability and hence no interest be leviable upto A.Y. 2003-04. The Special bench in the case of Ekta Promoters Pvt. Ltd. (supra) has also held that interest u/s 234D could not be charged for assessment years prior to A.Y. 2004-05, even though the refund for such earlier years have been received after 1-6-2003. We are aware that Kerala High Court in the case of CIT Vs. Kerala Chemical and Proteins Ltd. (325 ITR 1) has taken a contrary view. It is settled legal position that in case there are two contrary views on a particular issue, the view which favours the assessee should be adopted. In view of above, interest u/s 234D is not justified and the same is directed to be deleted. 7. In the result, the appeal is partly allowed a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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