TMI Blog2017 (10) TMI 1399X X X X Extracts X X X X X X X X Extracts X X X X ..... considered for computing the average value of investment which yielded exempt income during the year. The Assessing Officer is directed to apply this proposition of law and work out the disallowance, if any, under Rule 8D2(ii) of the Act. Accordingly, this ground of the assessee is allowed for statistical purposes. Disallowance of the provisions for leave encashment - Held that:- We find that the Kolkata ‘A’ Bench of the Tribunal in the assessee’s own case for the Assessment Year 2007-08, while adjudicating the same issue remitted the issue to the file of the Assessing Officer to decide the same taking into consideration the outcome of the case in M/S EXIDE INDUSTRIES LTD. & ANR. [2009 (5) TMI 894 - SUPREME COURT]. Deduction u/s 10B - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned CIT (Appeals) erred in not deleting the disallowance of ₹ 5,61.305/- treated by learned DCIT as expenses attributable to earning dividend income and did not hold that no expenses have been incurred to earn the said income. 2. That on the facts and in the circumstances of the case, the learned CIT (Appeals) erred in not holding that provision for leave encashment of ₹ 17,63,884/- is neither statutory liability nor contingent liability and therefore not to be considered for the purpose of computing disallowance u/s.43B(f) of the I.T. Act, 1961. 3. That on the facts and in the circumstances of the case, the Learned CIT (Appeals) erred in not holding that Penalty of ₹ 24,000/- is not paid for violation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a direction that the disallowance under Rule 8D2(ii) of the Rules, should be determined by applying the following propositions of law:- The Bombay High Court in the case of HDFC Bank Ltd. v. DCIT (2014) 366 ITR 505(Bom HC), held as follows:- Income-Expenditure incurred in relation to income not includible in total income-Exempt income-Assessee made investment in tax free securities- AO disallowed proportionate disallowance u/s 14A-Tribunal deleted disallowance holding that investment in tax free securities/investments was made by assessee s own funds-Held, finding of fact was given by tribunal that assessee's own funds and other non-interest bearing funds were more than investment in the tax-free securities-Said factual position was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve encashment. 7.1. We find that the Kolkata A Bench of the Tribunal in the assessee s own case for the Assessment Year 2007-08, while adjudicating the same issue remitted the issue to the file of the Assessing Officer to decide the same taking into consideration the outcome of the case in SLP civil 22889/2008 of the file of the Hon ble Supreme Court. 8. Respectfully following the same, we set aside this issue to the file of the Assessing Officer, for fresh adjudication in accordance with law. 9. Ground No. 3 is on the levy of penalty of ₹ 24,000/-. 9.1. The Assessing Officer disallowed an amount of ₹ 24,000/-, on the ground that it is hit by Explanation 1 to Section 37 of the Act. The assessee submits that this am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003-04- and in ITA Nos. 567 and 580/Kol/2009 for the assessment year 2004-05. The Hon'ble Tribunal considered the decision of Hon'ble Supreme Court in the case of CIT v in Sterling Foods (1999) 2371TR 579(SC)) and noted that the same was rendered with reference to section 80HH, whereas the provisions of section 10B were material different. It is also seen that the similar issue has come up for consideration while adjudicating the appellant s appeal for AY 2007-08 and AY 2008 09 and the issue was decided in favour of the appellant in Appeal No.428/XII/R-12/10-11 Dated 12.03.2013 Appeal No. 475/XII/12/08-09 dated 13.01.2014 following the above mentioned orders of the jurisdictional ITAT, Kolkata. In the light of the above discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has allowed the claim of the assessee by following this order of the Jurisdictional Tribunal. 15. We find no infirmity in the same. In the result, we uphold the finding of the ld. CIT(A) at para 4.2.2., of his order. In the result, this ground of the Revenue is dismissed. 16. Ground No. 3 is on the issue of provision for market to market losses. 16.1. The assessee has accounted for the losses that arose due to exchange rate fluctuations. The losses as on 31st March, 2009 was computed and claimed. The Assessing Officer disallowed the same on the ground that this is a notional loss the Kolkata B Bench of the Tribunal, for the assessee s own case for the Assessment Year 2008-09, had adjudicated the issue in favour of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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