TMI Blog2019 (7) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in the case of CIT Vs. Jayshree Tea Industries Ltd [ 2014 (11) TMI 1169 - CALCUTTA HIGH COURT] We also note that there is no mechanism given under the clause (f) to Explanation-1 of Sec. 115JB of the Act to workout/determine the disallowance. Therefore in the given facts circumstances, we feel that adhoc disallowance will service the justice to the Revenue and assessee. - Decided against revenue - R/TAX APPEAL NO. 128 of 2019 - - - Dated:- 24-6-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Appellant (s) : MRS MAUNA M BHATT (174) For The Opponent (s) : None ORAL ORDER ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 5 lakh as per the clause (f) to Explanation -1 of Section 115JB independently. 5. The Revenue being dissatisfied with the order passed by the Tribunal is here before this court with the present appeal. The Revenue has proposed the following substantial questions of law. [ A] Whether the Appellate Tribunal has erred in law and on facts in deleting the disallowances made u/s. 14A r.w.r 8D while computing income under normal provisions of Act, 1961, in respect of interest expenses, when assessee had earned exempt income, incurred interest expenses and due to mixed use of funds, rule 8D was correctly applied by Assessing Officer ? [ B] Whether the Appellate Tribunal has err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s below: 8. Taking into consideration the evidence on record and considering the decision of this court in the case of Commissioner of Income Tax -I vs. Gujarat State Fertilizers Chemicals Ltd. (supra), we are of the opinion that issue Nos. (iii) and (iv) required to be answered in favour of the assessee and against the revenue. In that view of the matter, we answer questions (iii) and (iv) referred to us in favour of the assessee and against the revenue. The appeal of revenue is dismissed. 25.2 We also note that in the recent judgment of Special Bench of Hon'ble Delhi Tribunal in the case of ACIT vs. Vireet Investment Pvt. Ltd. reported in 82 Taxmann.com 415 held that the disallownaces ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries Ltd. in GO No. 1501 of 2014 (ITAT No.47 of 2014) dated 19.11.14 wherein it was held that the disallowance about exempted income needs to be made as per the clause (f) to Explanation-1 of Sec. 115JB of the Act independently. The relevant extract of the judgment is reproduced below:- We find computation of the amount of expenditure relatable to exempted income of the assessee must be made since the assessee has not claimed such expenditure to be Nil. Such computation must be made by applying clause (f) of Explanation 1 under section 115JB of the Act. We remand the matter for such computation to be made by the learned Tribunal. We accept the submission of Mr. Khaitan, learned Senior Advocate that the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the view that as there is no mechanism provided under the clause (f) to Explanation-1 of Sec. 115JB of the Act to make the disallowance independently, therefore there would be unnecessarily further litigation, if the matter is sent back to the file of AO. 25.9 Thus, considering the peculiar circumstances of the case, we propose to limit the disallowance on an ad-hoc basis for ₹ 5 Lacs as per the clause (f) to Explanation-1 of Sec. 115JB of the Act. Thus the ground of appeal of the Revenue is partly allowed. 7. Having heard Ms. Bhatt, the learned Senior Standing Counsel appearing for the Revenue and having gone through the materials on record, we are of the view that no error, not to speak of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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