TMI Blog2019 (3) TMI 1745X X X X Extracts X X X X X X X X Extracts X X X X ..... hed dividend income by the assessee during the year. We find that the issue of investments made in the category of strategic investment have already been held against the assessee by the recent decision of Hon ble Supreme Court in the case of Maxopp Investments Ltd., vs CIT [ 2018 (3) TMI 805 - SUPREME COURT] We direct the Ld. AO to consider only those investments which had actually yielded dividend income to the assessee during the year for computing the disallowance under third limb of rule 8D(2) towards administrative expenses and from the figure arrived thereon, the Ld. AO should reduce the disallowance already made in the sum of ₹ 27,70,985/- while giving effect to this order. The disallowance however, should be restricted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order of Commissioner of Income Tax (Appeals) -22, [hereinafter referred to as the ld CITA], Mumbai dated 14/03/2017 for A.Y.2012-13 in the matter of order passed u/s.143(3) of the Income Tax Act, 1961. 2. The ground Nos. 1 to 4 raised by the assessee is with regard to action of the Ld. CIT(A) in confirming the disallowance u/s.14A of the Act read with Rule 8D(2)(iii) of the rules under normal provisions of the Act. The ground No.5 raised by the assessee is with regard to the action of the Ld. CIT(A) in confirming the disallowance u/s.14A of the Act while computing book profits u/s.115JB of the Act. 3. The brief facts of this issue are that the assessee is a public limited company engaged in the business of manufacturing cattle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Reliance Utilities and Power Ltd., reported in 313 ITR 340 (Bom) and pleaded that no disallowance of interest need to be made under second limb of Rule 8D(2). The assessee further stated that investments made in foreign companies should be excluded while computing the disallowance u/s.14A of the Act as the dividend received from such company, if any, would not be exempt in the hands of the assessee company. The assessee also pleaded that investments made in certain companies for consideration other than cash should also be excluded while computing the disallowance u/s.14A of the Act. The assessee filed detailed break-up of the aforesaid contentions before the Ld. AO. The Ld. AO recorded satisfaction that the disallowance made by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under third limb of rule 8D(2) of the rules. It is not in dispute that assessee had suo moto made disallowance of certain administrative expenses in the sum of ₹ 27,70,985/- in the return of income by giving the proper workings thereon. It is not in dispute that the Ld. AO had duly recorded his satisfaction for ignoring the said workings and resorted to computation mechanism under rule 8D of the rules. The arguments advanced by the Ld. AR before us has got lot of force in as much as the investments made in foreign companies should be excluded ; the disallowance voluntarily made by the assessee should be excluded while computing the final disallowance u/s.14A of the Act ; and disallowance under third limb of rule 8D of the rules shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should only be considered for that purposes. In the instant case, the assessee had culled out the actual expenses incurred in the sum of ₹ 27,70,985/- as being expenditure incurred for the purpose of earning exempt income, which, in our considered opinion, should be disallowed while computing the book profits u/s.115JB of the Act. 6.3. We find that the assessee placed reliance on certain orders of this Tribunal in its own case for the earlier years wherein disallowance at certain percentage of dividend income had been sought to be disallowed u/s.14A. We find that in the instant case, the Ld. AO had duly recorded his satisfaction and resorted to computation mechanism provided in the statement under Rule 8D(2) of the rules which can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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