TMI Blog2016 (3) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... 08-09 and compute the disallowance in the light of the above decision of the Coordinate Bench. Disallowance u/s 14A - suo motu disallowance made by the assessee - HELD THAT:- As decided in own case [ 2015 (12) TMI 1550 - ITAT AHMEDABAD] restricted the disallowance as were made by the assessee. In the present case, facts are identical, as the AO has not recorded as to how the expenditure as claimed by the assessee is not satisfactory, which is a condition precedent before applying the Rule 8D of the Income Tax Rules, 1962. Under these facts, we hereby delete the disallowance as were made by the AO. Thus, this ground of assessee s appeal is allowed. - I.T.A. No.2279/Ahd/2012, I.T.A. No.2338/Ahd/2012 - - - Dated:- 11-3-2016 - SHRI PR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder progress. The AO also made addition of ₹ 1,22,12,831/- by invoking the provisions of section 14A of the Act. Hence, total addition of ₹ 2,87,50,360/- was made by the AO. The assessee being aggrieved by the assessment order, preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee partly allowed the appeal of the assessee whereby restricted the disallowance in respect of the expenditure as taken @ 10% by directing the AO to work out the disallowance @ 5% of the expenditure. However, in respect of the disallowance made by invoking the provisions of section 14A of the Act, the ld.CIT(A) confirmed the disallowance. Aggrieved by the order of the ld.CIT(A), the Revenue is in appeal before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and also looking to the figure of capital work in progress for the year under appeal at ₹ 588.97 crores vis-a-vis total revenue of the assessee at ₹ 447.27 crores, in order to meet the ends of justice we deem it proper to sustain disallowance @ 1% of total employee cost of the company at ₹ 7,63,31,420/- and 1% of administrative and other expenses of ₹ 4,71,50,100/- and accordingly the sustained disallowance will arrive at ₹ 12,35,815/-. Thus in view of the above, ground of appeal raised by Revenue is rejected and that of assessee is partly allowed. 4.1. Since there is no change into the facts in the present case and the Revenue has not brought any contrary-material on record, we have no other different v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital expenditure incurred for the capital work in progress incurred to projects not completed upto the end of the year and also did not controvert to the suo moto allocation by the assessee of certain revenue expenditure which relates to the project under process. However, looking to the size of business of the assessee as well as impossibility of bifurcation of each and every expenditure falling under various heads and also looking to the figure of capital work in progress for the year under appeal at ₹ 588.97 crores vis-a-vis total revenue of the assessee at ₹ 447.27 crores, in order to meet the ends of justice we deem it proper to sustain disallowance @ 1% of total employee cost of the company at ₹ 7,63,31,420/- and 1% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Joint Investment (P) Ltd. vs. CIT reported at 372 ITR 694 (Delhi). The ld.counsel for the assessee also placed reliance on the judgement of Hon ble Gujarat High Court rendered in the case of Principal Commissioner of Income Tax vs. India Gelatine and Chemicals Ltd. reported at [2015] 376 ITR 553 (Gujarat) in support of submission that the assessee had sufficient interest-free funds out of which concerned investment had been disallowance u/s.14A of the Act was not justified. 9.1. On the contrary, ld.Departmental Representative supported the orders of the authorities below. He submitted that assessment year under appeal is 2009-10, therefore the AO has rightly computed disallowance by applying Rule 8D of the Income Tax Rules, 1962. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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