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TMI Blog2022 (1) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Assessing Officer ('Ld. A.O.') and upheld by Ld. Commissioner of Income Tax Appeals-35 ('Ld. CIT(A)') is bad in law. 1.1. That on the facts and circumstances of the case and law on the point, the Ld.CIT(A) has erred in upholding the disallowance of Rs.1,03,35,000/- made by Ld. AO under Section 14A of Income Tax Act, 1961 (hereinafter referred to as "Act") read with Rule 8D of the Income Tax Rules, 1962 (hereinafter referred to as "Rules") on account of expenditure incurred for earning dividend or other exempt income. 1.2 That the Ld. CIT(A) has erred in facts and in law in confirming the calculation made by Ld. AO without appreciating that investments which did not yield any exempt income were not required to be taken into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany has made investments to the tune of Rs.213,66,97,411/- for earning exempt income. From the perusal of the computation of total income filed by the assessee, he noted that an amount of Rs.79,880/- was disallowed u/s 14A of the Income Tax Act, 1961. Since the amount disallowed by the assessee was not commensurate to the total investment made by the assessee for earning the exempt income earned during the year, the A.O. asked the assessee to explain as to why disallowance under section 14A read with Rule 8D should not be made. Rejecting the various explanations given by the assessee and distinguishing the various decisions cited before him, the A.O. made addition of Rs.1,03,35,000/- to the total income of the assessee under section 14A r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 3.1. Learned Counsel for the Assessee filed the following chart and submitted that neither the A.O. nor the Ld. CIT(A) have analyzed the nature of investments as to whether the investment is yielding exempt income, taxable income or no income. Particulars Average Investment Amount % of total Investment Income earned during the year Taxable Exempt Investment in Group Entities 1,76,81,28,517 85.47% - 462,00,217 Investment in Equity Shares 5,95,690 0.03% - 38,585 Investment in Dividend Reinvestment- MF's 34,319 0.002% - 42,43,984 Investment in PMS 3,42,17,314 1.40% 71,52,333 85,139 Investment in Mutual Funds - Debt 25,00,00,000 11.70% - - Inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow. We findforce in the contentions of the Id. counsel for the assessee. This Tribunal in assessee's own case in ITA No. 7050/DEL/2017 for A.Y 2013-14 vide order dated 23.12.2021, has held as under : "4. Learned AR submitted that the authorities below failed to analyse the nature of investment as to whether the investment is yielding taxable income, exempt income or no income and that the satisfaction regarding the incorrect amount disallowed by the assessee was not recorded by the Assessing Officer. He, however, submitted that facts & circumstances and questions of law involved this year are identical to the ones involved for the assessment years 2009-10, 2010-11 and 2011-12, in which years, a coordinate Bench of this Tribunal in ITA.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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