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2019 (2) TMI 1647 - AT - Income TaxDisallowance of deduction in respect of expenses incurred on providing amenities to tenants - Income taxable under the head “Income from House Property” - HELD THAT:- Grounds of appeal are covered by the decision of Tribunal in assessee’s own case for Assessment Year 2011-12 in [2018 (7) TMI 1994 - ITAT MUMBAI]. Similar disallowance was made by AO, however, on appeal before the ld. CIT(A), the assessee raised contention that the entire amount received from the tenants on account of various services have not been spent and proportionate amount spent on tenants is reduced and remaining was offered for income. On the contention of the assessee, the ld CIT (A) directed the AO to grant the relief to the assessee after examining the details. However, on appeal before Tribunal the AO was specifically directed to allow the expenses as in the earlier year by calculating the same by taking the current year’s figure. We have noted that on the request of the assessee the Tribunal modified the direction of CIT(A) and directed the AO to allow the expenses as per direction given in earlier year. Disallowance u/s 14A - whether the investments which did not yield any dividend were not excluded while calculating the disallowance? - HELD THAT:- As decided in assessee's own case AO has included those investments which yielded no exempt income during the year for the purpose of calculation of disallowance under Rule 8D(2)(iii) which in our opinion is wrong and against the ratio laid down in the case of ACIT vs. Vireet Investments Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] as decided that investments not yielding any income during the year have to be excluded for the calculation of average investments and only thereafter the 0.5% has to be applied. We, therefore, respectfully following the special bench decision, direct the AO to work out the disallowance by excluding the investments which yielded no exempt income during the year. The ground is allowed. Adjustment in book profit u/s 115JB on disallowance u/s 14A - HELD THAT:- These grounds of appeal are also covered in favour of assessee by the decision of Vireet Investment P. Ltd. (supra). Special Bench of Delhi Tribunal in Vireet Investment P Ltd held that the computation under clause (f) of Explanation 1 to section 115JB(2), is to be made without resorting to computation as contemplated under section 14A read with rule 8D therefore, we direct the AO to make the fresh computation u/s 115JB by following the aforesaid decision.
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