TMI Blog2018 (10) TMI 1911X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee are allowed for statistical purposes. - ITA Nos.1321, 2666, 2667 & 1322/PUN/2016 - - - Dated:- 12-10-2018 - SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM Appellant by : Shri Kishor Phadke Respondent by : Shri Pankaj Garg ORDER PER D. KARUNAKARA RAO, AM : There are four appeals filed by the Assessee against the separate orders of CIT(A)-6,9 Pune, dated 14-03-2016 and 29-09-2016 respectively involving Assessment Years 2008-09 to 2011-12. 2. The issues are identical in all these appeals and it relates to disallowance u/s.14A r.w.r. 8D of the I.T. Rules, 1962. For the sake of standard, the grounds relevant for A.Y. 2008-09 are extracted here as under : The Appellant appeals against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed the return of income declaring total loss of ₹ 4,82,06,688/-. During the impugned assessment year, assessee received dividend income of ₹ 14,11,50,600/- and claimed tax exemption of the same u/s.10(34) of the I.T. Act, 1961. In the scrutiny assessment, AO invoking the provisions of section u/s.14A read with Rule 8D(2)(iii) of the Rules, 1962. AO rejected the assessee s submissions that the expenditure incurred for earning of the exempt income is ₹ 3,004/- for the A.Y. 2008-09. Eventually, AO made addition of ₹ 97,76,658/- (0.5% of the average value of investment of ₹ 195,53,31,585/- for the A.Y. 2008-09. 3.1 Similarly, the AO made addition of ₹ 1,00,19,428/- for the A.Y. 2009- 10, ₹ 54,04, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds and additional ground, it is evident that the assessee questions the disallowance on the ground of lack of satisfaction of the AO before provisions of section 14A of the Act r.w. Rule 8D of the I.T. Rules, 1962 are pressed into service. Further, on merits, the assessee questions that the assessee did not incur ₹ 97,76,658/- for earning of the exempt income ₹ 3,004/- was the expenditure fit for disallowance u/s.14A r.w.r 8D of the I.T. Rules, 1962. On the issue of satisfaction, Ld. Counsel for the assessee drew parallel with the facts relating to the decision of Tribunal in the case of Poonawalla Investment Industries Pvt. Ltd. Vs. DCIT in ITA Nos. 245 to 250/PUN/2016, dated 28-02-2018 and in the case of Serum Institute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 (Bombay), Ld. Counsel for the assessee submitted that the formula envisaged in the said rule need not be followed universally in all cases. He also mentioned that in certain cases the formala need not be applied. Bringing our attention to the contents of Para No.22 of the said judgment, Ld. Counsel for the assessee submitted that making adhoc disallowance having regard to the number of dividend transactions can also be a sustainable option available by the AO for the A.Y. 2008-09, i.e. post amended period of Rule 8D of I.T. Rules, 1962. 9. Ld. DR relied heavily on the orders of the AO and the CIT(A). He submitted that the year under consideration A.Y. 2008-09 since belonging to the post amended period, applying formula, i.e. 0.5% of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions were analysed and in the backdrop of the business of the assessee, the Tribunal concluded that there was no necessity to apply the formula prescribed in Rule 8D(2)(iii) of the Rules. We are, therefore, not in agreement with Mr. Suresh Kumar that Rule 8D(2)(iii) has been overlooked or ignored by the Tribunal completely. In the peculiar facts and circumstances of the assessee's case and the nature of its investments made, the Tribunal concluded that the disallowance worked out by the assessee should have been accepted. However, it did not accept the figure of disallowance worked out by the assessee. That although the Tribunal, in one line or sentence in para 8, says that the disallowance to be made under Rule 8D is determined a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case from the applicability of the formula laid down in Rule 8D(2)(iii) of the I.T. Rules, 1962. Therefore, agreeing with the Ld. DR, the issue stands remanded to the file of AO for fresh adjudication and for want of a speaking order. Needless to say, the AO shall afford reasonable opportunity of hearing to the assessee in accordance with the set principles of natural justice. Accordingly, grounds raised by the assessee are allowed for statistical purposes. 11. Since the issue is identical in all the three years, our finding given in A.Y. 2008-09 remanding the issue to the file of AO for fresh adjudication and pass a speaking order is applicable to the other assessment years too, i.e. A.Yrs. 2009-10 to 2011-12. 12. In the result, all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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