TMI Blog2019 (8) TMI 1694X X X X Extracts X X X X X X X X Extracts X X X X ..... enses made under third limb of rule 8D(2) of the rules is concerned, we direct the ld. AO to make disallowance by considering only those investments that had yielded exempt income to the assessee. This direction is given in the light of decision in the case of Vireet Investment (P) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] . Accordingly, the altered ground raised by the assessee with regard to disallowance u/s.14A of the Act r.w.r. 8D(2) of the rules under normal provisions of the Act is partly allowed. Disallowance made u/s. 14A of the Act, while computing book profits u/s.115JB of the Act, we find that the computation mechanism provided in rule 8D(2) of the rules cannot be imputed into Clause (f) to Explanation 1 to Section 115JB (2) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that the assessee has received dividend of ₹ 5,75,03,434/- and claimed the same as exempt u/s.10(34) of the Act in the return of income. The assessee did not make any disallowance of expenses incurred for the purposes of earning such exempt income in the return of income. The ld. AO applied the computation mechanism provided in rule 8D(2) of the rules and arrived at the disallowance under second limb of ₹ 11,17,58,894/- and under third limb to the tune of ₹ 64,97,089/-. The total disallowance made u/s.14A read with rule 8D of the rules worked out to ₹ 11,82,55,983/-. The ld. CIT(A) upheld the action of the ld. AO. 4. The assessee had filed altered grounds of appeal and had also filed the additional groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or making investments in various companies goes in favour of the assessee in the light of the decision of the Hon ble Jurisdictional High Court in the case of Reliance Utilities and Power Ltd., reported in 313 ITR 340. This Tribunal in A.Y.2008-09 in assessee s own case had deleted the disallowance of interest made under second limb of rule 8D(2) of the Rules. We find from perusal of the balance sheet as on 31/03/2010, total own funds available with the assessee is ₹ 295,23,58,270/-, whereas the investments made were only ₹ 131,21,08,283/-. Hence, the presumption that own funds is available with the assessee for making investments would apply even for the year under consideration. Respectfully following the decision of Hon ble J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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