Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 1082 - AT - Income TaxDisallowance made under Rule 8D2(ii) r.w.s. 14A - sufficiency of own funds - Held that:- AS the assessee has demonstrated that the interest paid was totally for sugar trading business or for loans on Plant & Machinery and no interest was paid for investment in assets which earned exempt income and also since the assessee is having its own funds many times more than the investments made, no disallowance is required to be made under Rule 8D2(ii) in view of the decision in the case of HDFC Bank v. DCIT (2016 (3) TMI 755 - BOMBAY HIGH COURT) and CIT v. Reliance Utilities & Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT) we do not see any infirmity in the order passed by the Ld.CIT(A) in deleting the disallowance under Rule 8D2(ii) of the Act. Eligibility to claim u/s. 80IA - initial Assessment Year - profit earned during the Assessment Year entitled for deduction under Section 80IA(5 without deducting the losses, which were absorbed in the earlier years? - Held that:- This issue in appeal is now squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Hercules Hoist Ltd. [2017 (6) TMI 1125 - BOMBAY HIGH COURT] wherein the Hon'ble Jurisdictional High Court taking note of the decision in the case of Vellayudhaswamy Spinning Mills P. Ltd [2010 (3) TMI 860 - Madras High Court] held that profit from the eligible business for the purpose of determining the quantum of deduction under section 80IA has to be computed before deduction of the notionally brought forward losses and depreciation of eligible business as they have to be allowed to be setoff other income in earlier years. - Decided against revenue Disallowance made under Rule 8D2(iii) - as per assessee only dividend earning investment is from Rajaram Solvex Ltd and the assessee has computed the suomoto disallowance at 0.5% of the investment made in such company as the expenditure attributable for earning such dividend income - Held that:- Accepting the contentions of the assessee, we hold that the disallowance under Rule 8D2(iii) of the Act could not be more than ₹.9,200/- since the calculation appears to be in consonance with the decision of the Special Bench in the case of ACIT v. Vireet Investments Private Limited [2017 (6) TMI 1124 - ITAT DELHI], wherein it has been held that only those investments which yielded dividend income should be considered for disallowance under Rule 8D2(iii) of the Act. Thus we direct the Assessing Officer to delete the disallowance made under Rule 8D2(iii) of the Act. - Decided in favour of assessee
|