TMI Blog2018 (7) TMI 2059X X X X Extracts X X X X X X X X Extracts X X X X ..... empt income should alone be considered, in the light of the decision of ACIT v. Vireet Investment (P.) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] the contention of the assessee is accepted. Accordingly, we restore the issue back to the file of the AO for disallowance u/s 14A by restricting the amount of disallowance to the lower of exempt income or amount arrived at by prescribed formula under rule 8D clause (iii) by taking into only those investments which yielded exempt income. Appeal filed by the assessee is partly allowed for statistical purposes. - ITA No.848/Bang/2018 - - - Dated:- 6-7-2018 - SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER For The Appellant : Shri B.Sudheendra, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Being aggrieved by the above order, an appeal was preferred before the ld.CIT(A) who vide impugned order confirmed the action of the AO. It is contended before the ld.CIT(A) that the amount of disallowance should be restricted to exempt income of ₹ 96,116/- and the investments which has not yielded dividend income/exempt income should be excluded for the purpose of computing average investment for working out disallowance under clause (iii) of sub-rule (2) of 8D of IT Rules. These contentions have been rejected by the ld.CIT(A). 5. Being aggrieved, the assessee is in appeal before us. The learned counsel for the assessee vehemently contended that the amount of disallowance u/s 14A cannot exceed the exempt income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment (P) Ltd. (supra). The relevant paragraph is extracted hereunder: 11.16. Therefore, in our considered opinion, no contrary view can be taken under these circumstances. We, accordingly, hold that only those investments are to be considered for computing average value of investment which yielded exempt income during the year. Thus the proposition that the amount of disallowance cannot exceed exempt income is settled. Accordingly, we hold that the disallowance cannot exceed the amount of exempt income. On the second limb of argument that only investments which yielded exempt income should alone be considered, in the light of the decision of the Special Bench of Tribunal in the case of ACIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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