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DCIT, Circle 11 (1) , New Delhi Versus M/s. Indiabulls Real Estate Ltd.

Addition u/s 14A read with Rule 8D - AO made disallowance without recording his dissatisfaction on any cogent ground - Held that:- The findings returned by AO that, “balance disallowance to the tune of ₹ 6,41,37,885/- needs to be disallowed as per Rule 8D” are not sustainable in the eyes of law as there is not an iota of reasons of dis-satisfaction recorded by AO as to work out of disallowance of ₹ 1,63,779/- voluntarily made by the assessee itself because sub-section (2) & (3) of se .....

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ction. Moreover, when the assessee is having ample cost free funds to the tune of ₹ 6049.43 crores and had not made investment to earn exempt income as on 31.03.2011, but in its subsidiaries for commercial expediency, the question of disallowance under Rule 8D does not arise. - AO has made disallowance without recording his dissatisfaction on any cogent ground and without disputing the computation of disallowance made by the assessee itself rather subjectively written that, “the balanc .....

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hereinafter referred to as the Revenue ), by filing the present appeal sought to set aside the impugned order dated 28.08.2014 passed by the Commissioner of Income-tax (Appeals)- XV, New Delhi, for the Assessment Year 2011-12 on the grounds inter alia that :- On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the addition of Rs.6,41,37,885/- made u/s 14A of the I.T. Act read with Rule 8D of the I.T. Rules. 2. Briefly stated the facts necessary for adjudi .....

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come Nil Nil ii) Disallowance of interest expenditure A*B/C Nil A. Interest Expenditure Nil B. Average Value of Investments income from which shall not form part of total income 12,86,03,32,828 Opening Investment 12,97,93,32,828 Closing Investment 12,74,13,32,828 C. Average value of Total assets 13,33,25,07,170 Opening Assets 12,25,59,98,549 Closing Assets 14,11,90,15,791 iii) Half% of Average Investment B*0.5% 6,43,01,664 Total Disallowance u/s 14A 1+2+3 6,43,01,664 3. Assessee carried the matt .....

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stances of the case. 5. Ld. DR for the Revenue challenging the impugned order contended inter alia that the AO has worked out the disallowance under Rule 8D as per accounts rendered by the assessee having been duly explained at the second last page of the assessment order; that section 114 of the Evidence Act, 1872 raises presumption in favour of the Revenue that there was nonsatisfaction of the AO and relied upon the decisions rendered by Hon ble Apex Court in Mak Data Pvt. Ltd. vs. CIT - 2013- .....

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see s own case for AY 2010-11, identical issue has been decided in favour of the assessee vide order dated 25.05.2017 in ITA No.3977/Del/2014 and also relied upon the case of Godrej & Boyce Manufacturing Company Ltd. vs. DCIT - 394 ITR 449 (SC). 7. Undisputedly, the AO, without pointing out any defect in the working out of disallowance voluntarily made by the assessee to the tune of ₹ 1,63,779/- and without by recording dis-satisfaction, proceeded to invoke the provisions contained u/s .....

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e a formula for determination of expenditure incurred in relation to income which does not form part of the total income under the Act in a situation where the Assessing Officer is not satisfied with the claim of the assessee. Whether such determination is to be made on application of the formula prescribed under Rule 8D or in the best judgment of the Assessing Officer, what the law postulates is the requirement of a satisfaction in the Assessing Officer that having regard to the accounts of the .....

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1961, read with rule 80 of the Income-tax Rules, 1962 - Expenditure incurred in relation to income not includible in total income (Rule 80) - Assessment years 2008-09 and 2009-10 - Whether it is only when computation or disallowance made by assessee or claim that no expenditure was incurred to earn exempt income is found not satisfactory with reference to accounts, that computation under sub-rule (2) of rule 80 is to be made - Held, yes - Whether where assessee had sufficient funds for making in .....

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