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2021 (3) TMI 764 - AT - Income TaxDisallowance u/s 14A - suo moto addition - HELD THAT:- All the Investments are liable to be considered for the purpose of making disallowance u/s. 14A irrespective of the head under which they are placed. The embargo is that only the investments yielding exempt income during the year should be considered for computing average value of investments. The Hon'ble Delhi High Court in ACB India Ltd. [2015 (4) TMI 224 - DELHI HIGH COURT] has held that the average value of investments, for the purposes of Rule 8D(2)(iii), should be confined to those securities in respect of which exempt income is earned and not the total investments. Similar view has been taken by the Special Bench of the Tribunal in the case of ACIT vs. Vireet Investments (P) Ltd [2017 (6) TMI 1124 - ITAT DELHI] - In view of the afore referred precedents, we set aside the impugned order to this extent and remit the matter to the file of Assessing Officer for recomputing the disallowance under Rule 8D(2)(iii) by considering only such investments in calculating the average value of investments, which have yielded exempt income during the year. The assessee will be allowed hearing opportunity in the fresh proceedings. It is further made clear that while computing disallowance u/s. 14A, the suo motu disallowance offered by the assessee should be accordingly reduced. Claiming deduction of Education Cess on income-tax for the year under consideration - HELD THAT:- This issue is no more res Integra in view of the judgment of Hon'ble jurisdictional High Court in Sesa Goa Lt. Vs. JCIT [2020 (3) TMI 347 - BOMBAY HIGH COURT] in which it has been held that Education Cess is not disallowable expenditure u/s. 40(a)(ii) of the Act. Similar view has earlier been taken in Chambal Fertilisers and Chemicals Ltd. and Another. [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] - We, ergo, direct to allow deduction for such an amount after verification. - Assessee appeal is allowed for statistical purposes.
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