TMI Blog2018 (11) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Continental Warehousing Corporation [2015 (5) TMI 656 - BOMBAY HIGH COURT] - CIT(A) has rightly deleted the disallowance made u/s. 14A. Decided in favour of assessee Addition u/s 14A - disallowance of indirect expenses under Rule 8D (2)(ii) - Held that:- It is the finding of the Assessing Officer that the assessee received dividend income of ₹.750/- and claimed as exempt income. In the circumstances, the disallowance shall be restricted only to the exempt income received by the assessee. Thus, we direct the Assessing Officer to restrict the disallowance u/s. 14A r.w. Rule 8D to ₹.750/-. Grounds raised by the Revenue are dismissed and the grounds rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made u/s 153A r.w.s. 143(3) by relying upon the decision of ITAT (S.B), Mumbai in All Cargo Global Logistic Ltd v. DCIT 137 ITD 287 (Mum) without appreciating the fact that the assessee has made investments during the year, income from which shall not or does not form part of the total income of the assessee. 4. Briefly stated the facts are that, there was a search and seizure action u/s.132 of the Act in the case of the assessee group on 24.09.2013. Notice u/s. 153A was issued on 02.02.2015 consequent to the search to file return of income and the assessee in response to the said notice filed its return of income on 21.04.2015 for the Assessment Years under consideration. Assessments were completed on 28.03.2016 u/s. 153A r.w.s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance made u/s. 14A of the Act. It is the finding of the Assessing Officer that assessee had filed return of income making suomotu disallowance u/s. 14A of the Act which return was filed prior to the date of search and the assessment was completed u/s. 143 of the Act. The Revenue could not rebut the findings of the Ld.CIT(A). Therefore, in the absence of any incriminating material found in the course of search and in view of the of the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Continental Warehousing Corporation (supra) and CIT v. Murli Agro Products Ltd., (supra) the Ld.CIT(A) has rightly deleted the disallowance made u/s. 14A of the Act. Thus we sustain the order passed by the Ld.CIT(A) for the Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med as exempt from taxation. Assessee also made suomoto disallowance of ₹.5,88,124/- being the expenditure attributable for earning the exempt income. In the course of Assessment Proceedings, the assessee filed detailed submissions as to why there should not be any further disallowance. However, not satisfied with the submissions of the assessee the Assessing Officer invoking the provisions of Rule 8D computed the disallowance under Rule 8D (2)(ii) and 8D (2)(iii) of the Act. 11. On appeal the Ld.CIT(A) considering the submissions of the assessee and taking note of various judicial pronouncements sustained the action of the Assessing Officer in disallowing the indirect expenses under Rule 8D (2)(ii) of the Act. However, the Ld.CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that the Ld.CIT(A) upheld the action of the Assessing Officer in so far as the disallowance of indirect expenses under Rule 8D (2)(ii) of the Act is concerned. However, he directed the Assessing Officer to compute the disallowance under Rule 8D (2)(ii) and 8D (2)(iii) of the Act by taking only the average value of investments should be worked out considering only those investments which yielded dividend income during the relevant Assessment Year. It is the finding of the Assessing Officer that the assessee received dividend income of ₹.750/- and claimed as exempt income. In the circumstances, the disallowance shall be restricted only to the exempt income received by the assessee. Thus, we direct the Assessing Officer to restrict t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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