TMI Blog2018 (10) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... i Saktijit Dey, JM And Shri Manoj Kumar Aggarwal, AM For the Assessee : Vijay Mehta, Ld. AR For the Revenue : Ram Tiwari, Ld. DR ORDER PER BENCH 1. Aforesaid appeal by revenue for Assessment Year [AY] 2012-13 contest the order of the Ld. Commissioner of Income-Tax (Appeals)-8 [CIT(A)], Mumbai, Appeal No.CIT(A)-8/IT-117/15-16 dated 27/10/2016 by raising the following effective grounds of appeal:- 1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of ₹ 1,70,13,192/- which was over above suo moto disallowance made by the assessee without appreciating the fact that the amount of disallowance u/s.14A of the I.T.Act, 1961 has to be computed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being resident corporate assessee was engaged in the business of Trading and investment financing. 2. During assessment proceedings, it was noted that the assessee earned exempt income by way of dividend, Long Term Capital Gains Share of profits from partnership firms aggregating to ₹ 69.11 crores against which it had made suo-moto expense disallowance u/s 14A for ₹ 76.84 Lacs, the computation of which has been extracted at para-5.1 of the quantum assessment order. It was noted that the assessee did not include the investments in partnership firms aggregating to ₹ 294 crores while arriving at the aforesaid disallowance. The assessee defended the same, inter-alia, on the premises that no expenditure w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd submitted that impugned additions may be restricted to 0.22% of average investments as done in earlier AYs. The rate of 0.22% is nothing but average of suo-moto disallowance made by assessee for AYs 2009-10 to 2011-12, which has also been accepted by the Tribunal. 5. The assessee, vide letter dated 30/07/2018 has drawn attention to the fact that the name of the assessee has been changed from Radha Madhav Investments Limited to Radha Madhav Investments Private Limited w.e.f. 21/05/2016 vide fresh certificate of incorporation issued by Registrar of Companies, Mumbai, a copy of which has been placed on record. The same is noted and we proceed to adjudicate the issue on merits. 6. We have carefully heard the rival contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acs translated into approx. 44% of common expenditure. This rate was 35.45% in AY 2011-12. However, no such tabulation has been placed before us for the impugned AY. In view of the stated facts, the disallowance as offered by Ld. AR @0.22% of average investment could not be accepted. 5.5 So far as the decision of Tribunal for AY 2008-09 as extracted in the impugned order and as relied upon by Ld. CIT(A) is concerned, the same is clearly distinguishable since it has been observed therein that the Ld. AO failed to fulfill the requirements of Section 14(2) qua satisfaction, which is not the case here since Ld. AO, with due application of mind has rejected the computations offered by the assessee. 5.6 Another aspect of the issue is qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatistical purposes. In the result, assessee s cross-objections become infructuous. 7. So far as adjustment of disallowance u/s 14A in computation of book profit u/s 115JB is concerned, we find that the matter stood squarely in assessee s favour by the cited judgment of Delhi Tribunal (Special Bench) rendered in ACIT Vs. Vireet Investment (P.) Ltd. [82 Taxmann.com 415]. Upon perusal of the same, we find that Special Bench, after considering two contrary decision of Hon ble Delhi High Court titled as CIT Vs. Goetze (India) Ltd. [2014 361 ITR 505] PCIT Vs. Bhushan Steel Ltd. [ITA 593/2015 dated 29/09/2015], took the view favorable to the assessee in terms of ratio of decision of Hon ble Supreme Court rendered in CIT Vs. Vegetabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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