TMI Blog2018 (1) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... -11 [2017 (9) TMI 655 - ITAT MUMBAI]. Considering the above, we decide last Ground of appeal against the revenue - I.T.A./2341/Mum/2016 - - - Dated:- 3-1-2018 - Sh.Rajendra,Accountant Member And Amarjit Singh,Judicial Member For The Revenue : Shri Abhijit Patankar- DR For The Assessee : Shri Jitendra B. Sanghvi-AR ORDER PER RAJENDRA, AM Challenging the order dated 25/01/2016of CIT(A)-8, Mumbai the Assessing Officer (AO) has filed the present appeal. Assessee-company, engaged in the business of leasing, investment in shares/stocks, merchant and investment banking, iled its return of income on 30/09/2011 declaring loss of ₹ 173. 73 crores under normal provisions and book loss of ₹ 212. 75 crores. Lat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 % of average investment . Thus, the assessee worked out the aggregate disallowance u / s . 14A to Rs . 24, 18, 76, 607 /- in the computation . Therefore, the Assessing Officer asked the assessee to furnish details regarding the working of expenditure incurred for earning exempt income as per the provisions of section 14A r . w . Rule 8D and also to submit fund flow statements to prove that the investments were made out of their own funds and not out of borrowed funds . The assessee filed submissions but the Assessing Officer found it to be not satisfactory . The Assessing Officer worked out the disallowance as per the formula laid down in Rule 8D and based on the total investments yielding exempt to Rs . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputing the 'normal income' . The assessee made submissions for non disallowance of expenditure under Rule 8D ( 2 )( iii ) for computation of book profit u / s . 115JB and relied on various case laws . The Assessing Officer considered the submissions of the assessee but did not accept the same . The Assessing Officer calculated the disallowance under section 14A as per the formula laid down in Rule 8D and this computation of disallowance was used as a base to the disallowance u / s . 115JB also by calculating the expenditure on a basis i . e . , the ratio of incomes granted exemption u / s . 115JB and in normal computation . Thus, the Assessing Officer worked out the disallowance by taking d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 8D ( 2 )( iii ) should be computed with reference to those investments on which exempt income is received during the year and excluding those investments n which no exempt income is received during the year . The Assessing Officer is directed to do so . These grounds of appeal are allowed . 5.1.5 In view of my decision for assessment year 2011-12 quoted above, disallowance under Rule 8D(2)(iii) should be computed with reference to those investments on which exempt income is received during the year and excluding those investments on which no exempt income is received during the year. The Assessing Officer is directed to do so. These grounds of appeal are allowed. 8 . As regards the disallowance u / s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome has been earned during the year . We find that this issue is covered in favour of the assessee by the Special Bench decision as referred above . The Special Bench has expounded that only investments has to be considered for computing the average value of investment on which exempt income is earned during the year . Since the ld . CIT ( A ) s directions on this issue is to consider only those investment on which exempt income is received, the same is in accordance with the above said Special Bench decision . Hence, we do not find any infirmity in the same and, accordingly, we uphold the same . 13 . As regards the disallowance u / s . 115JB is concern, we find that the Revenue s grievance is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The only plea which has been raised is that the disallowance adopted by the Assessing Officer following Rule 8D in section 14A should be upheld . Since this proposition is not in accordance with the Special Bench decision as above and the total disallowance in this regard is sufficient, we are of the considered opinion that there is no merit in this ground raised by the Revenue . Hence, the same stands dismissed . Respectfully following the above, Grounds No. 1 and 2 are decided against the AO. We would also like to mention that in case of Vireet Investment (P) Ltd. (82taxmann. com415), the Special Bench of the Tribunal has held that for computing average value of investment, for the purpose of disallowance u/s. 14A r. w. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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