TMI Blog2014 (2) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for disallowance as per Rule 8D – Decided in favour fo Assessee. - ITA No.2666/Del./2011 - - - Dated:- 30-1-2014 - Shri R. P. Tolani And Shri B. C. Meena,JJ. For the Petitioner : Shri Salil Aggarwal, Advocate and Shri Shalesh Gupta, CA For the Respondent : Ms. Meenakshi Vohra, Senior DR ORDER Per B. C. Meena, Accountant Member : This appeal filed by the assessee emanates from the order of the CIT (Appeals)-XVII, New Delhi dated 22.03.2011. The grounds of appeal read as under :- 1. That on the facts and in the circumstances of the case and in law, the learned CIT (Appeals) erred in upholding the addition u/s 14A at Rs. 30,15,375/- made by the Ld. A.O. without appreciating that the intent of the assessee was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of Rs. 33,52,259/- to the income of the assessee. The CIT (A) sustained the addition by holding as under :- 2.3. I have carefully considered the submissions of the Ld. AR and perused the assessment order passed by the AO. The AO was of the view that since the appellant has received exempt income, disallowance u/s 14A is required to be made. The AO applied Rule 8D on the entire investment and computed disallowance at Rs.1,75,00,000/-. The Ld. AR submitted that the appellant is not denying the applicability of provisions of section 14A and accordingly the appellant itself has computed disallowance at Rs.1,45,00,000/- under Rule 8D. However, the Ld. AR submitted that the appellant disputed further disallowance of Rs.30 lakh made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of investment, income from which does not or shall not form part of total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year. It does not exclude the investment made in joint venture companies. The legislature in its wisdom has not excluded the investment in joint venture companies for considering the disallowance. (iv) It is an admitted fact that the appellant has received dividend income from one of joint venture companies during the year under consideration which was exempt from tax. Considering the facts and circumstances of the case and legal provision on the issue, I am of the considered view that the A.O. was justified in computing the disallowance under Rule 8D b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard both the sides on the issue. After hearing both the sides and also considering the facts of the case, we find that investment made in four joint venture companies, namely, Chiron Panecea Vaccines (P) Ltd., Cambridge Biostability Ltd., Panheber Biotec (P) Ltd. (Panera Biotec (P) Ltd.) and Shivalik Solid Waste Management Ltd. were with the intention to expend the business of the assessee out of the commercial expediency and not with the intention of exempted income. The earning of exempted income by way of dividend income is only incidental of expanding its business. From making this investment, the assessee is able to enhance its sale substantially. In view of this factual position, we find that the CIT (A) was not justified in sustaini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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