9911796707
TMI Blog2014 (1) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in not deleting entire disallowance of Rs.45,95,677/- made under section 14A of the Income Tax Act.1961. 3. That the Id. CIT(A) erred on the facts and in the circumstances of the case in confirming the computation of disallowance under section 14A read with rule 8D(2)(iii) to Rs.35,45.959/- being 0.5% of the average investment. He further erred in not restricting the same to Rs.19,81,276/- as offered by the appellant. 4. Without prejudice, the disallowance as per third limb as contained in rule 8D(2)(iii) could not have been computed at Rs.35,45.959/- when the total expenses incurred by the appellant (other than the amount covered by rule 8D(2)(i) & 8D(2)(ii) ) were to the tune of Rs.23,19,542/- only. Thus the authorities below erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2009 shows that assessee has income only from dividend of Rs.4,50,38,009/- and interest on loan of Rs.76,89,395/-. The total expenditure under the interest and bank charges debited in the books of account of Rs.4,42,93,102/-. The majority of the investments were in the quoted shares and the loan was around Rs.10 crores. The assessee's company suo moto disallowed Rs.3,57,89,023/- u/s 14A of the Income-tax Act, 1961. 4. Ground Nos.1, 6 & 7 are general in nature and do not require adjudication, hence dismissed. 5. In the ground no.2 of the assessee's appeal, the assessee has raised that the CIT (A) was not justified in deleting the entire disallowance of Rs.45,95,677/- made u/s 14A of the Income-tax Act, 1961 and the revenue is also in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that since the majority of the income is from dividend and majority of the investments is in the shares which generate tax free income, the advances as a loan were a very small amount, therefore, the whole of the interest expenses are to be disallowed as per Rule 8D(2)(i) where the whole of the amount directly related to the income which does not form part of the total income has to be treated as expenditure in relation to income not includible into the total income. 8. We have heard both the sides on this issue. We have also perused the documents field before us in the paper book. The Assessing Officer has taken interest expenditure directly related to the investments at Rs.3,68,38,741/- and Assessing Officer has replaced the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges, therefore, this expenditure of Rs.3,38,266/- claimed was justified. The Assessing Officer mechanically applied the Rule 8D(2)(iii) and calculated the disallowance of Rs.35,45,959/- which was more than the total expenditure claimed by the assessee. In an alternative submission, ld. AR submitted that the disallowance cannot be more than claimed in the profit and loss account and reliance was placed on the decision of ITAT, Delhi Bench 'F' in the case of Renuka Financial Services Ltd. in ITA No.3467/Del/2011 dated09.08.2012 and also on the decision of ITAT, Delhi Bench 'D' in Jindal Equipment Leasing & Consultancy Services Ltd. in ITA No.4222/Del/2012 dated 12.04.2013. 10. Ld. DR submitted that the Assessing Officer as well as the CIT (A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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