TMI Blog2018 (6) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... 115JB - Held that:- This issue is covered in favour of assessee by the decision of M/s. Vireet Investment Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it has been held that the computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated under section 14A read with Rule 8D of the Income Tax Rules. Thus respectfully following the said decision we restore this ground to the AO who shall decide the issue - ITA No.4427/M/2016 - - - Dated:- 20-6-2018 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For The Assessee : Shri Yogesh A Thar, A.R. And Ms. Ayushi Modani, A.R. For The Revenue : Shri M.C. Omi Ningshen, D.R. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e strategic investments made by an assessee. 5. Without Prejudice to 1,2, 3 4 above, if Rule 8D were to apply, average investments for the purpose of calculation under Part 2(u) and (iii) of Rule 8D will include only those investments from which exempt income has been earned during the year. GROUND II: ADJUSTMENT OF SECTION 14A DISALLOWANCE WITH BOOK PROFIT U/S 115JB OF THE ACT: 1. On the facts and in the circumstances of the case and in law, the CIT (A) erred in upholding the action of the Ld. AO of adding the disallowance u/s 14A of ₹ 2,27,18,529/- to the book profit computed u/s 115 JB of the Act. 2. The Appellant prays that the Ld. AO be directed to delete the addition made to book profits computed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case is squarely covered by the Tribunal in assessee s own case in earlier years. The Ld. D.R. submitted that all the expenses have to be seen on year to year basis and the disallowance has to be made by applying the provision of section 14A read with rule 8D and thus prayed the Bench that the order of the Ld. CIT(A) be affirmed. 6. We have heard the rival submissions and perused the material available on record. The undisputed facts are that during the year, the assessee earned exempt income of ₹ 8,27,30,037/- and made a suo motto disallowance under section 14A read with rule 8D of ₹ 52,05,005/- as detailed in para 8 of the assessment order comprising the direct expenses on account of Demat and Depository charges ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / may give rise to tax free income. Sr. No. Name Employee Designation Emoluments [Cost to Company] (Amount in Rs.) % Attributable to investments activity Attributed amount (In Rs.) 1 Mr. Ketan Mazumdar VP - Finance 19,63,140 20% 3,92,628 2 Mr. S K Shenoy Sr. Manager - Finance 5,42,836 20% 1,08,567 3 Mr. Vithoba Patil Sr. Executive - Accounts 3,72,817 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 Printing Stationery 17,06,922 71,179 5 Books Periodicals 2,8 7,671 11,996 6 Telecommunication Expenses 65,45,141 2, 72,932 7 Postage and Telegram 7,73,152 32,240 8 Automobile Expenses 34,99,986 1,45,949 9 Conveyance Charges 3,39,561 14,160 TOTAL 1,85,01,021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd gone through the fact and circumstances of the case. From the above it is clear that no disallowance u/s Rule 8D can be made for the reason that the above facts clearly demonstrated that the assessee is having non-interest bearing funds available in the shape of share capital and reserves and surpluses with him amounting to ₹ 285.27 crore which is more than the amount of investment made in interest earning instruments amounting to ₹ 18.19 crores and once availability of amount from interest free fund of the assessee is more than the investment, then a presumption arises that assessee might have invest out of interest free fund available with him. This view of ours is supported by the decisions of Hon'ble Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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