TMI Blog2022 (3) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... issue to the file of the AO with a direction to recompute the disallowance u/s 14A r.w. Rule 8D by considering the investment which has actually yielded dividend income and exclude the investments on which the assessee has not received any dividend income in view of the decision in the case of ACIT vs. Vireet Investment Pvt. Ltd., [ 2017 (6) TMI 1124 - ITAT DELHI] and case of ACB India Ltd [ 2015 (4) TMI 224 - DELHI HIGH COURT] - Grounds raised by the assessee are accordingly allowed for statistical purposes. - ITA No. 5992/Del/2018 - - - Dated:- 16-2-2022 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER Assessee by : Shri Madhur Aggarwal, Advocate Revenue by : Shri Kumar Padmapani Bora, Sr. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars Assessee (Rs.) i) Rule 8D(2)(i) -- ii) Rule 8D(2)(ii) 31,27,619 iii) Rule 8D(2)(iii) 9,07,573 Total 40,35,192 4. It was argued that the assessee has not received dividend on certain shares and, therefore, no disallowance could be made u/s 14A in those shares on which no dividend has been received. It was further argued that the share capital and free reserves of the assessee far exceeded the investment made, the income of which is exempt and, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,192/- is upheld. I find no reason to interfere with the AO's order on* this issue. Therefore, this Ground of appeal is dismissed. 5. In the result, the appeal is Dismissed. The A.O. is directed to take consequential action at the time of giving effect within one month of receipt of order accordingly. 5. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- 1. That the learned Commissioner of Income Tax (Appeals)-36, New Delhi has erred both in law and on facts in upholding the disallowance of sum of ₹ 40,35,192/- by incorrectly invoking section 14A of the Act read with Rule 8D of the Income Tax Rules 1962. 1.1 That the learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Godrej Boyce Manufacturing Co. Ltd., reported in 394 ITR 449, he submitted that the provisions of section 14A would apply to dividend income on which tax is payable u/s 115O of the IT Act. Referring to the decision of the Hon ble Supreme Court in the case of South Indian Bank vs. CIT, reported in 130 taxmann.com 178, he submitted that the Hon ble Supreme Court in the said decision has held that where interest free own funds are available with the assessee exceeded their investment in tax free securities, investment would be presumed to be made out of assessee s own funds and proportionate disallowance was not warranted u/s 14A on the ground that separate accounts were not maintained by the assessee for investments and other expenditure i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 8. We have heard the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find, the assessee, in the instant case, has claimed exempt income of ₹ 5,70,99,418/- and has shown investment of ₹ 88.5 crores. We find, the AO rejecting the explanations given by the assessee that no expenditure has been incurred for earning the exempt income, computed the disallowance u/s 14A r.w.r 8D at ₹ 40,35,192/- which he added to the total income of the assessee. We find, the ld.CIT(A) sustained the disallowance made by the AO, the reasons of which have already been reproduced in the prece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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