TMI Blog2017 (5) TMI 1665X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of coordinate Benches, we decide the sole ground of appeal in favour of the assessee and delete the disallowance made by the Assessing Officer. - I.T.A. No.4087/Mum/2013 (Assessment Year:2010-11) And I.T.A. No.6931/Mum/2014 (Assessment Year:2011-12) - - - Dated:- 18-5-2017 - Shri B R Baskaran And Shri Sandeep Gosain, JJ. Appellant by : Shri A. V. Sonde Respondent by : Shri Jagdish P. Jangid ORDER Sandeep Gosain, These two appeals filed by the assessee is directed against the order dated 05.03.2013 and 07.08.14 passed by Commissioner of Income Tax (Appeals)-40, Mumbai (hereinafter called as the CIT(A) for respectively A.Y 2010-11, 2011-12. ITA No. 4087/Mum/2013 for A.Y 2010-11 Grounds of Appeal 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated activities. It filed its return of income for A.Y. 2010-11 declaring the total income of ₹ 1,25,20,462/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (in short the Act‟). The case was selected for scrutiny and after assessment proceedings the assessment order was passed. 5. During the assessment proceedings, the Assessing Officer noted that the assessee had shown investment as on 31/03/2010 amounting to ₹ 38,63,43,457/- as compared to ₹ 34,81,96,954/- in the preceding year, the assessee was asked to furnish explanation with regard to disallowance as per Section u/s 14A of the Act read with rule 8D(2)(iii) of the Income Tax Rules. In response thereof the appellant submitted that the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that since Rule 8D is applicable for the year under consideration the disallowance has rightly been worked out as per Rule 8D. 10. We have heard the rival submissions and gone through the material placed before us including the decision of the ITAT Mumbai relied upon by the assessee. The co-ordinate bench of Mumbai Tribunal in the case of Cape Trading Pvt. Ltd. vs. ACIT, Mumbai ITA No 3772/M/2013, has decided the identical issue in favour of the assessee holding as under:- The Assessing Officer while making the disallowance u/s 14A worked out the disallowance under Rule 8D(2)(iii) at ₹ 20,86,230/- which shows that the working under the provisions of Rule 8D negates the actual total expenditure debited by the assessee in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her expenses. Therefore, it turns out to be contradictory to the actual facts and gives absurd results in complete disregard to the scheme of disallowance u/s 14A. Therefore, the provisions of Rule 8D(2)(iii) cannot be applied in the case of the assessee as it becomes unworkable and unrealistic. In the facts and circumstances of the case, we find that when the provisions of Rule 8D(2)(iii) becomes unworkable then in the absence of any finding as well as any specific expenses debited to the P L account which could have a direct or proximate nexus for earning the dividend income the disallowance made by the assessee suo motu is just and proper. Accordingly, we delete the disallowance made by the Assessing Officer. 5 ITA No. 4090/MUM/2013 Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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