TMI Blog2018 (11) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest earned on bonds issued by IIFCL is exempt u/s. 10(15)(iv) of the Act in the subsequent years. The principle of consistency is applicable in the instant case and the facts and law remaining the same, a contrary view on the said matter in the year under consideration would result in injustice to the assessee. Accordingly, we direct the AO to allow exemption of interest income u/s. 10(15)(iv) of the IT Act. Disallowance made u/s.14A r.w.Rule 8D2(iii) - Held that:- We observe that AO has taken average investment without reducing there from investment not earning any exempt income. In view of the decision of ITAT Special Bench in case of Vireet Investment[2017 (6) TMI 1124 - ITAT DELHI], we direct the AO to exclude investment not earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax-free bonds issued by India Infrastructure Finance Co. Ltd, is not exempted u/s. 10(15)(iv) of the Act, then the Appellant prays that the investment in such tax-free bonds not be considered while computing the amount of average value of investment, income from which does not or shall not form part of total income for the purpose of determining disallowance of expenditure in relation to exempt income u/s. 14A read with Rule 8D(2)(ii) and Rule 8D(2)(iii) of the Income-tax Rules, 1962 and the learned Assessing Officer be directed to reduce the total income accordingly. 3. It was contended by learned AR that the assessee invested ₹ 25,39,59,863 in bonds issued by India Infrastructure Finance Co. Ltd. ( IIFCL ) carrying a rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Jute Corporation of India Ltd. v. CIT (supra.), National Thermal Power Co. Ltd. v. CIT (supra.), Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1 (SC), etc. and made the following observations: 13. The underlined observations in the above passage do not curtail the ambit of the jurisdiction of the appellate authorities stipulated earlier. They do not restrict the new/additional grounds that may be taken by the assessee before the appellate authorities to those that were not available when the return was filed or even when the assessment order was made. The sentence read as a whole entitles an assessee to raise new grounds /make additional claims :- if the ground so raised could not have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of its liability to pay purchase tax as it entertained a belief that it was not liable to pay purchase tax under the Bengal Raw Jute Taxation Act, 1941. Thus, the ground existed when the return was filed. The assessment order was even made and received by the assessee. It is only after the appeal was filed that the assessee claimed a deduction in respect of the amount paid towards the purchase tax under the said Act. It is also significant to note that the assessee's entitlement to claim deduction had been held to be valid in view of an earlier judgment of the Supreme Court in Kedarnath Jute Mfg. Co, Ltd. v. CIT [1971] 82 ITR 363. This was, therefore, a case of error in perception/judgment. Despite the same, the Supreme Court upheld t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpt u/s. 10(15)(iv) of the Act in the subsequent years. In view of these facts, the principle of consistency is applicable in the instant case and the facts and law remaining the same, a contrary view on the said matter in the year under consideration would result in injustice to the assessee. Accordingly, we direct the AO to allow exemption of interest income of ₹ 1,30,99,452/- u/s. 10(15)(iv) of the IT Act. 7. Assessee is also aggrieved for disallowance made u/s.14A r.w.Rule 8D2(iii). We observe that AO has taken average investment without reducing there from investment not earning any exempt income. In view of the decision of ITAT Special Bench in case of Vireet Investment, we direct the AO to exclude investment not earning any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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