TMI Blog2021 (2) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... evant AY, so the direction by the Ld. CIT(A) for AY 2015-16, is legally untenable Law applicable on this issue will be as laid in REI Agro Ltd. (supra) wherein this Tribunal has directed that only investments which yielded dividend income should be considered for the purpose of computing of disallowance under Rule 8D(2)(iii) of the Rule. Therefore, the directions given by the ld. CIT(A) with regard to three specific investments made in mutual fund to AO to consider the monthly average of such dividend bearing investment have not the sanction of law, since it may, if applicable only from AY 2017-18 and not before that, therefore, we modify the order of the Tribunal and direct the AO to consider the disallowance made under Rule 8D(2)(iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of those investments appearing in the balance sheet as on 01.04.2014 and 31.03.2015 which actually yielded dividend income during the relevant financial year. However, it was pointed out by the ld. A.R that when the Ld. CIT(A) passed the appellate order dated 15.02.2019 after relying on the decision of this Tribunal in REI Agro Ltd. (supra) observed that only investments which yielded dividend income should be considered for the purpose of Rule 8D. However, the ld. CIT(A) directed the AO in respect of three specific investments in mutual funds to consider the monthly average of such dividend bearing investments as opposed to the average of the opening and closing value of such investments as appearing on the first day and the last d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erage value of investment in this relevant assessment year. The Ld. AR also drew the Tribunal s order in assessee s own case for AYs 2009-10 and 2010-11 wherein on identical facts and circumstances, the Tribunal had directed the AO to restrict disallowance under Rule 8D(2)(iii) to the average value of dividend bearing investments in consonance with the decision in REI Agro Ltd. (supra). However, according to Ld. AR, in the order impugned dated 26.02.2020 though the Tribunal at para 11 has observed that We note that the coordinate Bench of ITAT Kolkata in the case of REI Agro Ltd Vs DCIT reported in 144 ITD 141 wherein it was held that only the dividend bearing securities should be considered while computing the disallowance under Rule 8D( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be dismissed at the threshold. 5. We have heard rival submissions and gone through the facts and circumstances of the case. We note that ground no. 5 (supra) raised by the assessee in Form No. 36 has not been specifically dealt with. We note that for the relevant assessment year i.e. AY 2015-16 the settled law in respect of computing disallowance under Rule 8D(2)(iii) was the decision of this Tribunal in REI Agro Ltd. (supra). There is an amendment in law which happened by the passage of the Finance Act, 2016 which is applicable for AY 2017-18 onwards, so the amended provision of section 14A read with Rule 8D of the Rules would be not be applicable for this relevant AY, so the direction by the Ld. CIT(A) for AY 2015-16, is legally unte ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
