TMI Blog2018 (6) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the disallowance under Section 8D of the Rules. Such abdication of duty in not permissible in law. See THE COMMISSIONER OF INCOME TAX, THE DEPUTY COMMISSIONER OF INCOME TAX VERSUS M/S MICROLABS LTD. [2016 (4) TMI 219 - KARNATAKA HIGH COURT] - decided against revenue - I.T.A. No. 569/2015 & I.T.A. No. 229/2016 - - - Dated:- 15-6-2018 - Vineet Kothari And S. Sujatha, JJ. Mr. K.V.Aravind , Adv. for Appellants - Revenue Mr. A.Shankar and Mr. M.Lava , Advs. for Respondent - Assessee ORDER 1. The Revenue has filed these appeals under Section 260-A of the Income Tax Act, 1961, purportedly raising a substantial question of law arising from the order of the learned Income Tax Appellate Tribunal vide Annexure-C dated 27.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 3.87 Crores in Trichy Steel Rolling Mills, ₹ 1,87,00,000 was invested in the financial year ending 31st March, 2003. It is contended by the learned Authorised Representative that these investments are long term investments, which form a part of the record before the IT Department and that no expenditure has been incurred to either maintain or monitor these investments. It is submitted that the assessee has earned exempt income of ₹ 18,400 only, out of the investment of ₹ 46,000 invested in the shares of Andhra Bank and that no dividend income has been earned out of the investment of ₹ 3.87 Crores made in its sister concern M/s. Trichy Steel Rolling Mills P. Ltd.. The learned Authorised Representative contends ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorised Representative alternatively placed reliance on the decision of the ITAT, Mumbai Bench in the case of Daga Global Chemicals Pvt. Ltd., V/s. ACIT in ITA No.5592/Mum/2012 wherein it was stated to be held that the disallowance under Section 14A r.w. Rule 8D cannot exceed the exempt income. It is submitted by the learned Authorised Representative that since the exempt income earned in the case on hand is ₹ 18,400, the maximum amount that could be disallowed is ₹ 18,400. 6.4 Per contra, the learned Departmental Representative, in arguments and submissions put forth, has placed strong reliance on the action and finding in the orders of the authorities below. 6.5.1 We have heard the rival contentions and have peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factual matrix of the case on hand and in this view of the matter, it cannot be said that the assessee was incurring expenditure to maintain and / or monitor its long term investments of ₹ 3,87,00,000 in its sister / associate concern M/s. Trichy Steel Rolling Mills P. Ltd., and ₹ 46,000 invested in the shares of Andhra Bank. In view of the legal and factual circumstances of the case as discussed and for the reasons stated above, we delete the disallowance of ₹ 1,93,730 made by the Assessing Officer under Section 14A r/w. Rule 8D. 4. The said controversy with regard to Section 14-A read with Rule 8D of the Rules has been decided by this Court in the following two judgments which are quoted below for ready ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. We order accordingly. The aforesaid shows that the Tribunal has followed a decision of the Bombay High Court in the case of CIT v. HDFC Bank Ltd., (ITA No.330/2012 disposed of on 23/7/2014). When the issue is already covered by a decision of the High Court of Bombay with which we concur, we do not find any substantial question of law would arise for consideration as canvassed. 6. In view of the above observations, the appeal is dismissed. (ii) M/s.Pragathi Krishna Gramin Bank vs. Joint Commissioner of Income Tax (ITA Nos.100001/2018 100002/2018 decided on 28.05.2018 by the Division Bench of this Court at Dharwad Bench. 13. The manner in which the aforesaid disallowance has been made by the assessing authority a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and figures in the regularly maintained Books of Accounts. The assessing authority also could not have called upon the Assessee himself to undertake the exercise of computing the disallowance under Section 8D of the Rules. Such abdication of duty in not permissible in law. Since no such exercise has been undertaken by the assessing authority, the case calls for a remand. 15. In this view of the matter, the findings of all the three authorities below for Section 14A of the Act are set aside and the matter is remanded back to the Assessing Authority for re-computing the disallowance of expenditure, if any, under Section 14A of the Act, in accordance with law. 5. In view of the aforesaid issue being covered now by the two decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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