9911796707
TMI Blog2013 (3) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... al by the assessee is directed against the order passed by the Commissioner of Income-tax (Appeals) on 21.06.2011in relation to the assessment year 2008-2009. 2. The only ground raised in this appeal is against the confirmation of disallowance of Rs. 76,71,070 made by the Assessing Officer u/s 14A read with Rule 8D. Briefly stated the facts of the case are that the assessee earned dividend income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest we find that the assessee stated before the learned CIT(A) that the total investment leading to exempt income was only Rs. 34.44 crore as against which its own free reserves and share capital were to the tune of Rs. 119.85 crore. The learned CIT(A) did not consider this fact as relevant and upheld the disallowance. 4. Section 14A basically provides that no deduction shall be allowed in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crore. The Hon'ble jurisdictional High Court in the case of CIT Vs. Reliance Utilities and Power Ltd. [(2009) 313 ITR 340 (Bom.)] has held that if there are interest free funds available with the assessee sufficient to meet its investment and at the same time loan has been raised it can be presumed that the investments were from interest free funds and resultantly no disallowance of interest can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment, income from which does not form part of total income. Principally we see no reason to interfere with the disallowance made as per Rule 8D because the assessment year under consideration is 2008-2009 and as per the judgment of the Hon'ble jurisdictional High Court in case of Godrej & Boyce Ltd. Mfg. Co. VS. DCIT [(2010) 328 ITR 81 (Bom)], disallowance u/s 14A is maintainable as per Rule 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this order the Special Bench has laid down a mechanism for working out the disallowance u/s 14A. The Assessing Officer is directed to work out the second part of disallowance as per Rule 8D afresh in the light of the afore-noted order of the Special Bench after allowing a reasonable opportunity of being heard to the assessee. 7. In the result, the appeal is partly allowed. Order pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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