TMI Blog2016 (5) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... e called for under section 14A of the Act, though not as exactly laid out by the AO. In the factual matrix of the matter, as discussed above, we deem it reasonable to restrict the disallowance under Rule 8D(2)(iii) on an adhoc basis - Decided partly in favour of assessee - ITA Nos. 1010, 1011 & 1012/Mum/2014 - - - Dated:- 30-3-2016 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Appellant : Shri M. Subramanian Respondent : Shri G.M. Doss ORDER Per Jason P. Boaz, A.M. These three appeals by the assessee are directed against the orders of CIT(A)-1, Thane dated 23.10.2013 for assessment years 2008-09 to 2010-11. These appeals, having interconnected issues, were heard togethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the circumstances of the case and in law, the learned CIT(A) erred in confirming the action of the A.O. in computing the House Property income at ₹ 71,400/-. 3. At the outset, the learned A.R. for the assessee submitted that only ground No. 2 are being urged in these appeals and all other grounds are not being pressed. In view of this, ground No. 1 for A.Y. 2008-09 to 2010-11 and ground No. 3 for A.Y. 2009-10 and 2010-11 are not pressed and consequently being rendered infructuous are accordingly dismissed. 4. Ground No. 2 - Disallowance under section 14A of the Act 4.1 The facts of the case on this matter, as emanate from the record, are that the assessee is a partner in firms from where he derives share of profit whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 8D(2)(ii) ₹ 47,98,428/- Rule 8D(2)(iii) ₹ 4,27,477/- Assessment Year 2010-11 Rule 8D(2)(i) Nil Rule 8D(2)(ii) ₹ 95,13,560/- Rule 8D(2)(iii) ₹ 5,56,860/- 4.2 On appeal before the learned CIT(A), the assessee, inter alia, contended that the provisions of section 14A of the Act were not applicable in the case on hand since (i) no expenses had been incurred for earning of share of profits from the firms, exempted under section 10(2A) of the Act. In support of the proposition, that since no portion of the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. interest paid had a direct relation with interest income and was not related to the assessee s share in the profits from firms. The learned CIT(A) consequently held that no disallowance could be made out of interest expenditure on borrowed funds invested in the firms to the extent of interest earned from investment in such firms. In this view of the matter, the learned CIT(A) recomputed and deleted/reduced the disallowance made by the AO under section 14A read with Rule 8D(2)(ii) as under: - A.Y. Disallowance (Rs. ) Disallowance Deleted/Reduced (Rs. ) Disallowance Confirmed (Rs. ) 2008-09 22,93,341/- 22,93,341/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 28(v) of the Act and therefore interest on borrowed capital ought to be allowable against such remuneration received from firms in view of the decision of the Coordinate Benches in the case of Sudhir Dattaram Patil (supra) and Delite Enterprises (supra). The learned D.R. on his part placed reliance on the findings in the impugned order. 4.3.2 We have heard the rival submissions and perused and carefully considered the material on record on record; including the judicial pronouncements cited and relied upon. The matter for adjudication before us is with respect to the disallowance under section 14A read with Rule 8D(2)(ii) of ₹ 26,66,738/- for A.Y. 2010-11 only. A plain reading of section 14A of the Act indicates that if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2010- 11 (Rs. 5,56,860/-), the learned A.R. for the assessee submitted that no disallowance under section 14A was called for as the share of profits received by the assessee from firms, which was exempt under section 10(2A) of the Act was received by the assessee only after all expenditures incurred in earning the said profit had been debited and taxes thereon had been paid. Per contra, the learned D.R. supported the impugned order of the learned CIT(A). 4.4.2 We have heard the rival contentions and perused and carefully considered the material on record, including the judicial pronouncements cited. The AO has computed the disallowance under section % on the average investment as on the opening balance and closing balance of inves ..... X X X X Extracts X X X X X X X X Extracts X X X X
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