9911796707
TMI Blog2014 (11) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... end of Rs. 2,19,99,865/- and share profit from a partnership firm amounting to Rs. 1,46,977/-. The assessing officer noted that the assessee had not quantified any amount of expenditure for the purpose of disallowance in terms of section 14A. The assessing officer thus felt satisfied that the provisions of section 14A read with rule 8D are applicable in the assessee's case, hence he proceeded to work out the disallowance. Accordingly, he disallowance under clauses (ii) and (iii) of rule 8D (2) for sums aggregating Rs. 48,74,535/- was made. 3. Before the Ld. CIT(A), it was submitted that, so far as disallowance of interest is concerned, the same should not be made as the assessee had reserve and surplus of more than 154 cores, whereas the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance of Rs. 76.71 lakh basically comprises of two components, being, firstly the interest" disallowed at Rs. 59.79 lakh and secondly, other expenses disallowed at 0.5%. As regards the first component, being, disallowance of interest 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 ~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 respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be any question of making any disallowance u/s 14A. We, therefore, order for the deletion of addition u/s 14A to the extent of Rs. 59.79 lakh on account of interest in relation to investment in tax free bonds. 5. The second component of this disallowance is a sum of Rs. 16.92 lakhs which was made by the Assessing Officer at the rate of ½ of the average of the value of investment, 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)], disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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