TMI Blog2019 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... the said disallowance. Therefore, the additional expense disallowance made under normal provisions, as made by Ld. AO, could not be sustained and the stand of FAA, though on different reasoning, was to be confirmed. Accordingly Ground Number- 1 stand dismissed. Plea of exclusion of strategic investment as accepted by FAA while granting relief to the assessee, is concerned, same stand could not be sustained in view of decision of Hon’ble Apex Court in Maxopp Investment Ltd. Vs CIT [2018 (3) TMI 805 - SUPREME COURT OF INDIA] Applicabily of Rule 8D in MAT - adjustment of disallowance u/s 14A while computing Book Profits u/s 115JB - HELD THAT:- As submitted that in terms of the cited decision of Special bench, disallowance was to be wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of ₹ 82,71,741/- made by the Assessee was on the basis of CBDT Circular No.5 of 204 dated 11.02.2014 and provisions of Rule 8D? ii. Whether on the facts and in the circumstances of the case and in law the Ld. Commissioner of Income tax(Appeals) is justified in deleting the amount of disallowance u/s 14A r.w. Rule 8D(2)(iii) to the amount of ₹ 38,86,138/- over and above the suo-moto disallowance of ₹ 82,71,741/- made by the Assessee in view of the recent decision of the Hon ble High Court of Karnataka in the case of United Breweries Ltd. vs. Deputy Commissioner of Income tax Central Circle-2(3), Bangalore [2016] 72 taxmann.com 102 (Karnataka) wherein it has been held that section 14A is applicable even where motive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 115JB was determined at ₹ 318.29 Crores as against ₹ 317.90 Crores computed by the assessee. 2.2 During assessment proceedings, it transpired that the assessee earned exempt dividend income of ₹ 497.04 Lacs and offered suo-moto expense disallowance against the same u/r 8D(2)(iii) for ₹ 82.71 Lacs. The said disallowance was worked out by taking into consideration those investments which yielded exempt income during the year. The disallowance worked out by the Tax Auditor was ₹ 121.57 Lacs which was arrived at by considering those investment which were capable of yielding exempt income. Finding the disallowance worked out by Tax Auditor in line with CBDT Circular No. 5/2014 dated 11/02/2014, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT Vs. Vireet Investment (P.) Ltd. [82 Taxmann.com 415] wherein it has been held that only exempt income yielding investments were to be considered to arrive at the said disallowance. Therefore, the additional expense disallowance made under normal provisions, as made by Ld. AO, could not be sustained and the stand of first appellate authority, though on different reasoning, was to be confirmed. Accordingly, Ground Number- 1 stand dismissed. 4.2 So far as the plea of strategic investment as accepted by first appellate authority while granting relief to the assessee, is concerned, we find that the same stand overruled by the recent decision of Hon ble Apex Court rendered in Maxopp Investment Ltd. Vs CIT [12/02/2018 91 Taxmann.com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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