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2019 (2) TMI 1543 - AT - Income TaxDisallowance u/s.14A - assessee made suo moto disallowance on an estimated basis for the purpose of computation of book profits u/s 115JB - MAT computation - HELD THAT:- Disallowance u/s.14A r.w.r. 8D(2)(iii) of the rules under normal provisions of the Act, we find that the Special Bench of the Delhi Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] had held that only those investments that had yielded exempt income are to be considered while working out the disallowance under Rule 8D of Rules. Respectfully following the said Special Bench decision, we do not find any infirmity in the order of the CIT(A) with regard to disallowance u/s.14A under normal provisions of the Act. Accordingly Ground No.(i) raised by the revenue is dismissed. Disallowance u/s.14A is to be made in terms of Clause(f) of Explanation-1 of Section 115JB. Hence, we direct the AO to look into the expenses debited in the profit and loss account and identify each and every expenditure and ascertain the quantum of expenditure incurred for the purpose of earning exempt income and make disallowance under Clause(f) of Explanation 1 to Section 115JB of the Act. Accordingly, Ground raised by the Revenue is allowed for statistical purposes subject to directions contained hereinabove. Disallowance u/s.14A in respect of investment in shares which were made to obtain controlling interest in companies. We find that this issue had been settled in favour of the Revenue by the decision of Hon’ble Supreme Court in the case of Maxoop Investments Ltd., vs. CIT [2018 (3) TMI 805 - SUPREME COURT OF INDIA] accordingly Ground raised by the Revenue is allowed.
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