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TMI Blog2013 (8) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... ently, is hereby treated as infructuous and the same is dismissed. We now first proceed to dispose off the Revenue's appeal in ITA no.5285/Mum./ 2011, vide which, following grounds have been raised:- "1. In the facts and in the circumstances of the case and in law , the learned CIT(A) has erred in allowing the assessee's claim of the environment monitoring and community development expenses of Rs.4,91,62,163/- treating it as expenditure incurred for the purpose of business. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the assessing officer to' allow the expenditure on replacement of meters amounting to Rs.19,99,36,872/- as revenue expenditure. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the Assessing Officer not to allocate any head office expenses for the purpose of computing deduction u/s.80-IA in respect of Goa unit, Samalkot Unit and Windmill Unit. 4. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the Assessing Officer to adopt the market pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissing the ground raised by the Revenue, has followed the earlier years' order. Consequently, following the said order, ground no.1, raised by the Revenue is treated as dismissed. 8. In ground no.2, the Revenue has challenged the deletion of expenditure on replacement of meters amounting to Rs. 19,99,36,872, as revenue expenditure. 9. This issue has been discussed by the Tribunal in its order cited supra from Paras-8 to 12, wherein the Tribunal has decided the issue in favour of the assessee for the reasons stated therein. Since the issue before us is identical to the issue decided by the Tribunal in assessee's own case cited supra, consequently, the ground raised by the Revenue is treated as dismissed. 10. Ground no.3, relates to allocation of headquarter expenses for the purpose of computing the deduction under section 80IA in respect of Goa Unit, Samalkot Unit and Wind Mill Unit. 11. This ground has been discussed by the Tribunal in its order cited supra in Paras-14 to 18, wherein the Tribunal has decided the issue in favour of the assessee for the reasons stated therein. Since the issue before us is identical to the issue decided by the Tribunal in assessee's own case cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.65,58,58,204, on account of expenditure incurred for earning of exempt income. 20. The Assessing Officer noted that during the year under consideration, the assessee has claimed divided income of Rs.23,80,81,398, which has been claimed as exempt under section 10. The assessee was required to furnish the details of disallowance as per section 14A and rule 8D. In response, the assessee submitted that it has offered disallowance under section 14A of Rs.5,46,16,385, as per the working under rule 8D and also made various other submissions which has been incorporated in Para-4.1 of the assessment order. The Assessing Officer held that the disallowance worked out by the assessee is not in accordance with the provisions of rule 8D and, therefore, he worked out the disallowance in Para-4.0 in the following manner:- "4.10 Considering the above, the disallowance u/s 14A is computed as under:- i. Disallowance of directly related expenditure; ii. Disallowance of interest expenses; a. Amount of interest paid - Rs. 3,08,76,49,956 b. Average amount of Investments / Stock-in-trade Opening balance of investments 940.81 crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, only those investment which has actually yielded tax free income during the year can only be considered. In other words, the expenditure on investment which had not yielded tax free income during the year should have not been taken into consideration in the formula of rule 8D, while working out the disallowance. It was also argued that rule 8D(2) can only be invoked when the Assessing Officer has not satisfied with the claim made by the assessee. 23. The learned Commissioner (Appeals), however, rejected the assessee's entire contentions and held that, firstly, the provisions of section 14A will apply in this case and disallowance has to be worked out, as the assessee itself has admitted that the said provisions are applicable and has suo-motu made disallowance of Rs. 5,46,16,385. Further, he also held that the assessee has only offered the disallowance by considering only those investments on which income was received. In other words, the investment on which the income was not received was not considered for the purpose of disallowance. This is contrary to the provision of law and also clause (2) of rule 8D. The Assessing Officer has, accordingly, invoked the formula provid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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