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TMI Blog2015 (1) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts as narrated in for the assessment year 2009-10. The assessee claimed exemption u/s. 10(33) of the Act to the extent of Rs. 6,03,939/- on dividend income received. The Assessing officer invoked the provisions of sec. 14A of the I.T. Act and disallowed expenditure incurred by the assessee in relation to income which does not form part of total income under the I.T. Act. 4. On appeal, the CIT(A) confirmed the decision of the Assessing officer Against this, the assessee is in appeal before us. 5. The Ld. AR submitted that the assessee had earned tax free income aggregating to Rs. 7,75,634/- for the assessment year 2008-09 and Rs. 6,03,939/- for the assessment year 2009-10. According to the Ld. AR, in the return of income filed, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if rule 8D is to be applied, the "average value of investments the income from which shall not or does not form part of total income." is nil since the assessee does not hold any investments and the income has only been received from stock in trade held by the assessee. For this view, the Ld. AR placed reliance on the judgment of the Kolkata High Court in the case of DCIT vs. Gulshan Investment Company Limited (142 ITD 89). 9. The Ld. AR further submitted that if at all it is held that the disallowance under Rule 8D is permissible, no disallowance of interest expenditure as per Rule 8D(2)(ii) is warranted since the interest free funds available with the assessee far exceed the investments in assets the income from which shall nor or d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2005-06 in I.T.A. Nos. 10&66/Coch/2009 dated 11-02- 2011. 12. We have heard both the parties and perused the record. We find that an identical issue came up for consideration before the Jurisdictional High Court in assessee's own case reported in 344 ITR 259 wherein it was held as under: "Section 14A of the Income Tax Act, 1961, was inserted by the Finance Act, 2001, with retrospective effect from April 1, 1962. The object of section 14A is to ensure that so much of the expenditure incurred for earning income that does not constitute total income of the assessee, should not be allowed. In other words, when income is outside the tax net, expenditure incurred for earning such income should not be allowed to be set off in the computat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate accounts for the expenditure incurred towards interest paid on funds borrowed such as deposits utilized for investment in securities, bonds and shares which yielded tax free income. In the absence of separate accounts for investments which earned tax free income, the Assessing officer worked out a formula which was the average cost of deposit in the year under consideration and applying it he made proportionate disallowance of interest attributable to the funds invested to earn tax- free income. The Tribunal set aside the order. On appeal to the High Court: Held, allowing the appeal, (i) that the disallowance made by the Assessing officer was valid. (ii)that the method adopted by the Assessing officer in estimating the average ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture which should be considered for disallowance under rule 8D from 2007-08 onwards". 13. The judicial discipline requires consistency in its proceedings. We find no difference in the facts and circumstances of the present case as compared to the earlier cases decided by the Jurisdictional High Court. Respectfully following the above judgment of the Jurisdictional High Court, we are inclined to dismiss this ground of the assessee. 14. The next ground in I.T.A. No. 326/Coch/2014 is with regard to treatment of surplus realized on sale of pledged jewellery as income of the assessee. 15. We have heard both the parties and perused the record. We find that this issue came for consideration before the Jurisdictional High Court in the assessee&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. 17. The next ground in I.T.A. No. 326/Coch/2014 is with regard to addition made on account of excess cash found by the assessee as income of the assessee. 18. We have heard both the parties and perused the record. We find that a similar issue came up for consideration before the Jurisdictional High Court in the assessee's own case reported in 349 ITR 569 wherein it was held as under: "That when there was no possibility of any one claiming any amount against the surplus in the suspense account maintained by the assessee the as could not treat it as a liability or a provision for liability. Further, as and when a claim was made and the assessee had to make any payment, the payment would be allowable as a deduction in the year i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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