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TMI Blog2019 (9) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... passed. 2. Brief facts as taken from ITA No. 718/Hyd/2018 in the case of Manjeera Hotels and Resorts Pvt. Ltd. are, the assessee company is in hotel business & Power generation, filed its return of income for the AY 2012-13 on 28/09/2012 admitting an income of Rs. 12,56,28,285/-, which was processed u/s 143(1) of the Income-tax Act, 1961 (in short 'the Act'). Subsequently, the case was selected for scrutiny under CASS and accordingly, notice u/s 143(2) dated 12/08/2013 was issued and duly served on the assessee company and also notice u/s 142(1) was issued. In response to the said notices, the AGM (finance) of the assessee company furnished the information as called for. 2.1 During the course of assessment proceedings, the AO observed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- towards dividend income, hence, the addition made by the AO is confirmed. 5. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal, which are common in all the appeals under consideration except the quantum of addition: 1. That the Learned Commissioner of Income Tax (Appeals) ["the CIT(A)] erred in law and on facts in upholding the action of the Learned Assessing Officer ["the AO'] in disallowance of Expenditure u1s.14A of Income Tax Act, 1961. 2. The Commissioner of Income Tax (Appeals) failed to appreciate that the a. Investments were made in the Subsidiary company and in group company totally from the shareholder's funds in earlier financial years and such investm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Since, this issue has already been considered by this bench in favour of the assessee, we accept the submission of the ld. AR and adjudicate as below: 8.1 We find that similar issue came up for consideration before the coordinate bench of this Tribunal in the case of Transport Corporation of India Ltd. in ITA No. 117/Hyd/2016 vide order dated 21st September, 2016 wherein the coordinate bench has held as under: "11.1 While carefully reading the rule 8D(2)(ii), the formula given are: A X B/C Where A = amount of expenditure by way of interest other than the amount of interest included in clause (i) incurred during the previous year: B = the average of value of investment, income from which does not or shall not form part of the to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion, we direct the AO to recalculate the disallowance as per rule 8D as per the above guidance. Accordingly, ground raised by assessee is allowed." As the issue under consideration is materially identical to that of the said case, following the conclusions drawn therein we direct the AO to recalculate the disallowance as per rule 8D as per the guidelines given as above in the case of Transport Corporation of India and calculate the disallowance of expenditure under rule 8D(2)(ii) & (iii) taking the average investment from which the exempt income is received. 8.2. Coming to ground No. 2b and ground No. 3, ld. AR submitted that the interest expenditure incurred by the assessee are towards the secured loans which are secured against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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