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2020 (11) TMI 943 - AT - Income TaxDisallowance u/s.14A r.w.r. 8D - Computation of deduction - HELD THAT:- AO had duly recorded his satisfaction as to why the computation mechanism provided by the assessee is incorrect and also had applied the computation mechanism provided in Rule 8D(2)(iii) of the Rules by considering all the investments. Special Bench of Delhi Tribunal in the case of Vireet Investments vs. ACIT [2017 (6) TMI 1124 - ITAT DELHI] categorically held that only those investments which had actually yielded exempt income should be considered for the purpose of working out the disallowance under third limb of Rule 8D(2) of the Rules. Assessee had furnished the workings for the same on without prejudice basis in page 7 of the paper book. The ld. AO is directed to go through the same and re-compute the disallowance u/s.14A by considering only those investments which had actually yielded exempt income under Rule 8D(2)(iii) of the Rules. On such re-computation, the ld. AO is also directed to reduce the sum of ₹ 5,40,000/- being the amount already disallowed voluntarily by the assessee. Ground Nos.1 – 1.3 raised by the assessee are allowed for statistical purposes. Deduction of education cess u/s.37(1) - additional ground raised by the assessee - HELD THAT:- As in the light of the decision of the Hon’ble Supreme Court in the case of NTPC Ltd [1996 (12) TMI 7 - SUPREME COURT], the additional ground raised by the assessee is admitted and taken up for adjudication We find that the issue raised in additional ground is squarely covered in favour of the assessee by the decision in the case of Sesa Goa Ltd., vs. JCIT [2020 (3) TMI 347 - BOMBAY HIGH COURT] wherein it was categorically held that the expression “cess” ought not to be read or included in the expression “any rate of tax levied” as appeared in Section 40a(ii) - Additional ground raised by the assessee is allowed.
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