Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (2) TMI 893 - ITAT HYDERABAD

2016 (2) TMI 893 - ITAT HYDERABAD - TMI - Disallowance u/s 14 r.w.r 8D - Held that:- Since assessee has investments and shares which are yielding exempt incomes, we have no option than to confirm the amount under Rule 8D(2)(iii). - Decided against assessee - I.T.A. No. 875/HYD/2015 - Dated:- 23-2-2016 - Shri B. Ramakotaiah, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Petitioner : Shri K.K. Gupta, AR For the Respondent : Shri M. Sitaram, DR ORDER Per S. S. Viswaneth .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the appeal, the appellant requests for order of deletion of the addition made . 3. The only issue in this appeal is as to whether the disallowance made under the provisions contemplated u/s. 14A of the Act is applicable or not in the circumstances of the case? 4. The brief facts of the case are that the assessee is a company and is engaged in the business of manufacturing and selling of veterinary vaccines & medicines. The assessee filed its return of income admitting a Gross Total income o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ule 8D and added ₹ 12,96,909/- to the income of the assessee. 6. Aggrieved by the assessment order, the assessee filed first appeal before the CIT(A) contending that the main objects of the assessee company is that it acquires shares and sells the same and on such acquisitions it does not involve the process of earning the dividend income. The Ld. CIT(A) deleted the addition of ₹ 4,82,000/- made under Rule 8D(2)(ii) of Rules by following the case of in the case of CIT Vs. Reliance Ut .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

icable, the disallowance of Rule 8D(2)(iii) of Rules is not in pursuance of the order passed in the case of HDFC Bank Limited Vs. Dy.CIT by the Hon'ble High Court. 8. The Ld. DR relied on the order of the ITAT D Bench, Mumbai in the case of HDFC Bank Limited Vs. DCIT dt. 23-09-2015 which consider the whole gamut of judgments to support the order of the CIT. 9. We have considered the rival contentions and perused the material on record. Even though assessee submitted before Ld. CIT(A) that it .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

82,000/- under Rule 8D(2)(ii) and further disallowance of 0.5% of average value of investments under Rule 8D(2)(iii) of ₹ 7,94,909/-. On submissions from assessee and examining the facts on record, Ld. CIT(A) deleted the disallowance under Rule 8D(2)(ii) on which Revenue is not aggrieved. The assessee is now contesting the disallowance as per Rule 8D(2)(iii). Ld. CIT(A) while confirming the amount, has relied on the Co-ordinate Bench decision in the case of M/s. Bellwether Microfinance Fun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rofinance Fund Pvt. Ltd., in ITA No. 1743/Hyd/2013 dt. 27-06-2014 (supra), the Co-ordinate Bench has considered the issue as under: 7.1 On careful reading of the aforesaid provision, it would be evident that it is in three parts. The first part contained in sub-rule D(2)(i), speaks of disallowance of the amount of expenditure directly relating to income which does not form part of the total income. Second part under sub-rule 8D(2)((ii) deals with disallowance to be computed on the basis of formu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d constitute expenditure in relation to exempt income and would be disallowed u/s 14A of the Act. Therefore, if we examine the facts of the present case in the context of the aforesaid statutory provision, it is quite clear that AO while working out disallowance under rule 8D(2)(i) has taken the total investment irrespective of the fact whether they have yielded income or not during the assessment year under consideration. The reasoning of the AO in this regard is actual earning or receipt of in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

refore, one has to look to the definition of total income as appearing in section 2(45) of the Act, which reads as under: "total income" means the total amount of income referred to in section 5, computed in the manner laid down in this Act ; Section 5 of the Act reads as under:- Scope of total income. 5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which- (a) is received .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r a profession set up in India. (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year. Explanation 1.-Income accruing or arising outside India shall not be deemed to be received57 in India withi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/s 2(45) refers to section 5 which envisages scope of total income . On a reading of section 5 of the IT Act, it would be evident that as per this section total income is of any previous year and which includes income from whatever source derived which is received or deemed to be received in India in such year by or on behalf of such person or accrues or arises or is deemed to accrue or arises to him in India during such year or accrues or arise to him outside India during such year. Considered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt made by the assessee. On a conjoint reading of clause (i) and clause (iii) of Rule 8D(2), the difference between them is clearly discernible. While clause (i) speaks of disallowance of expenditure directly relating to income which does not form part of total income, clause (iii) provides for disallowance of expenditure of the average value of investment, income from which does not or shall not form part of the total income, as appearing in the balance sheet of the assessee on first day and la .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version