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2017 (6) TMI 391 - AT - Income TaxDisallowance u/s 14A - Held that:- So far as interest disallowance under rule 8D(2)(ii) is concerned, it must stand deleted. Coming to the disallowance under 8D(2)(iii), we find that admittedly total expenditure incurred by the assessee is ₹ 30,22,749 but then we are to go by the forumulae under rule 8D(2)(iii), the disallowance comes to ₹ 62,94,250. That will be an absurdity to be permitted, and, in any case, disallowance of administrative expenses for earning tax exempt income cannot be more than actual administrative expenses. What the assessee has offered for suo motu disallowance on the facts of this case is ₹ 10,00,000 which is almost one third of total administrative expenses. When it was pointed out to the learned Departmental Representative and she was asked as to whether given the peculiar facts of this case, how the suo motu disallowance offered by the assessee cannot be considered reasonable, she did not have much to say. We agree with the learned counsel that the disallowance so offered cannot be considered to be unreasonable by any standard nor has that been alleged before us either. Thus we disapprove the additional disallowance by invoking rule 8D, particularly 8D(2)(iii) as well, and delete the impugned additional disallowance so restored to by the Assessing Officer. - Decided in favour of assessee. Disallowance u/s 14A while computing book profit under section 115JB - Held that:- The above issue is now covered, in favour of the assessee, by Hon’ble jurisdictional High Court’s judgment in the case of CIT Vs Alembic Ltd [2017 (1) TMI 513 - GUJARAT HIGH COURT] Set off of speculation loss - CIT-A allowed claim - Held that:- CIT(A) has not erred allowing the set off of speculation loss on the basis of a decision of this Tribunal in the case of Virendra Kumar Jain Vs ACIT [2010 (5) TMI 870 - ITAT MUMBAI] wherein held in sub-section (4) of section 73 or in any other provision, there is no express language or any implication to the effect that the right of the assessee to carry forward the speculation loss for a period of eight subsequent assessment years has been taken away. The amendment made by the Finance Act, 2005 with effect from 01.04.2006 is merely to substitute the words “four assessment years” for the words “eight assessment years”. In our opinion, the assessee’s contention that any speculation loss computed for the assessment year 2006-07 and later assessment years alone would be hit by the amendment and such loss can be carried forward only for four subsequent assessment years is correct. The vested right of the assessee has not been taken away. - Decided in favour of assessee.
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