TMI Blog2021 (7) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... ower projects at Orissa; that the interest expenses is not allocable to the exempt income; and that there is no nexus between the interest paid and claimed as expenditure and the exempt income and therefore no disallowance u/r. 8D(2)(ii) of the Rules is called for. While applying the law laid down by Hon'ble jurisdictional High Court in the case of CIT vs. Indian Sugar Exim Corporation Ltd [ 2012 (3) TMI 100 - DELHI HIGH COURT] , CIT vs. Taikisha Engineering India Ltd. . [ 2014 (12) TMI 482 - DELHI HIGH COURT] and CIT vs. HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT] CIT(A) directed the deletion of interest component u/r. 8D(2)(ii) of the Rules for all these three years. No illegality or irregularity in the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany engaged in the business of power generation. For all these three assessment years, the assessee derived exempt income and made suo moto disallowance u/s. 14A of ₹ 5,00,045/- for assessment year 2012-13, ₹ 1,25,81,066/- for assessment year 2013-14 and ₹ 1,28,76,558/- for assessment year 2014-15. Assessing Officer, however, calculated disallowance u/s. 14A of the Income Tax Act ( the Act ) read with Rule 8D of the Income-tax Rules ( the Rules ) at ₹ 21,28,28,842/- for assessment year 2012-13, ₹ 27,14,75,759/- for assessment year 2013-14 and ₹ 13,53,28,564/- for assessment year 2014-15 and made an addition of ₹ 21,23,28,797, ₹ 25,88,94,693/- and ₹ 12,24,52,006/- for assessment years 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee has submitted the details of expenditure debited in the accounts and that out of the total expenditure of ₹ 12,232.75 lakh a sum of ₹ 11,152.03 lakh is entirely relatable to its manufacturing/business activities of the appellant company, and therefore only ₹ 1,080.72 lakh may be allocated in accordance with s. 14A of the Act, and accordingly the appellant has computed ₹ 1,21,36,000/- as the amount which may be allocated as per Rule 8D(2)(iii) of the Rules; that as regards the interest expenses, vide order sheet dt. 08.06.2016 the appellant's AR was asked to submit details of the interest expenses of ₹ 17.98 crore debited in accounts, which have been submitted according to which interest clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears as the amount which may be allocated as per Rule 8D(2)(iii) of the Rules; that the computation of the appellant submitted in the WS dt. 10.04.2017 is incorrect in as much as the disallowable expenditure under Rule 8D(2)(iii) of the Income Tax Rules, 1962 would be ₹ 2,12,04,095/- and ₹ 1,37,23,450/- respectively in the above two assessment years being 0.5% of the average value of investment of ₹ 274,46,90,000/- and ₹ 424,08,19,000/- respectively in the above two assessment years; that as regards the interest expenses, vide order sheet dt. 10.03.2017 the appellant's AR was asked to submit details of the interest expenses debited in accounts, which have been submitted, according to which interest claimed are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locable to the exempt income, in the absence of any material to the contrary, we find it difficult to disturb the same. Further, learned CIT(A) applied the binding precedents to these facts. In these circumstances, we do not find any illegality or irregularity in the findings of the ld. CIT(A) in deleting the interest component u/r. 8D(2)(ii) of the Rules. Though the CIT(A) confirmed the addition of disallowance under rule 8D(2)(iii), the assessee had already suo moto disallowed the same and it does not require any interference. 9. Coming to the direction of the ld. CIT(A) to recompute the MAT payable by assessee after excluding the disallowance u/s. 14A of the Act, such a finding is fortified by the decision of Special Bench of this Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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