TMI Blog2020 (6) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... rage investment therefore, this computation of disallowance cannot disregard and override the actual expenditure attributable for earning the exempt income. The reliance placed by assessee in the case of Cheminvest Ltd [ 2015 (9) TMI 238 - DELHI HIGH COURT] also support the case of the assessee. Accordingly, we set aside the orders of the authorities below on this issue and delete the disallowance made by the Assessing Officer made by the AO u/s. 14A by applying Rule 8D(2). Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be any expenditure attributable to the income not forming part of the total income of the assessee being dividend income. Even otherwise, before making an addition under Section 14A of the Act, the Assessing Officer needs to arrive at proper satisfaction that the assessee has incurred certain expenditure for earning the exempt income. In the case of the assessee, the Assessing Officer has not arrived at a proper satisfaction and directly applied Rule 8D(2 without even giving any finding on the claim of the assessee that no expenditure has been incurred by the assessee for earning the dividend income. Thus, ld A.R. has pleaded that the disallowance made by the Assessing Officer and confirmed by the CIT (A) on account of dividend incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee for assessment year 2010-2011 that no claim has been made in respect of dividend income. The formula given in the Rule 8D does not recognize the actual expenditure incurred by the assessee but it calculates the disallowance being 0.5% of the average investment therefore, this computation of disallowance cannot disregard and override the actual expenditure attributable for earning the exempt income. The reliance placed by ld A.R. of the assessee in the case of Cheminvest Ltd (supra) also support the case of the assessee. Accordingly, we set aside the orders of the authorities below on this issue and delete the disallowance made by the Assessing Officer of ₹ 10,81,553/- made by the AO u/s. 14A by applying Rule 8D(2) and allow the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule itself. This rule was inserted as a result of directions of Hon ble High Court in the case of Shivsagar Veg Restaurant vs ACIT (2009) 319 ITR 433 (Bom), wherein, it was, inter alia, observed as under: We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a tim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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