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2019 (3) TMI 12 - AT - Income TaxDisallowance u/s 14A - total investments for Rule 8D - strategic investment - disallowance in the opinion of AO, was to be worked out by considering the total investments irrespective of the fact that whether these investments yielded any exempt income during impugned AY or not - HELD THAT:- We find that the disallowance worked out by the assessee is well in line with the decision of Delhi Tribunal (Special Bench) rendered in ACIT Vs. Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it has been held that only exempt income yielding investments were to be considered to arrive at the said disallowance. Therefore, the additional expense disallowance made under normal provisions, as made by Ld. AO, could not be sustained and the stand of FAA, though on different reasoning, was to be confirmed. Accordingly Ground Number- 1 stand dismissed. Plea of exclusion of strategic investment as accepted by FAA while granting relief to the assessee, is concerned, same stand could not be sustained in view of decision of Hon’ble Apex Court in Maxopp Investment Ltd. Vs CIT [2018 (3) TMI 805 - SUPREME COURT OF INDIA] Applicabily of Rule 8D in MAT - adjustment of disallowance u/s 14A while computing Book Profits u/s 115JB - HELD THAT:- As submitted that in terms of the cited decision of Special bench, disallowance was to be worked out with reference to expenses debited by the assessee in the Profit & Loss Account on actual basis and not by resorting to computational mechanism as provided in Rule 8D (2). Followed Reliance Capital Ltd. [2019 (2) TMI 1543 - ITAT MUMBAI] where it was held that disallowance u/s 14A was to be made in terms of Clause (f) of Explanation-1 to Section 115JB. Therefore, the matter, stand restored back to the file of AO to ascertain the actual expenses debited in the Profit & Loss Account to earn the exempt income and make disallowance u/s 115JB accordingly. The assessee is directed to provide the details thereof. Ground No. 3 stands allowed for statistical purposes.
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