TMI Blog2018 (4) TMI 1952X X X X Extracts X X X X X X X X Extracts X X X X ..... on as per the relevant facts in preceding assessment year. The assessee therefore fails in his former substantive ground. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- There is no dispute about the fact that both the lower authorities have applied rule 8D whilst computing the impugned disallowance as applicable from assessment year 2008-09 onwards. The hon ble apex court recent decision in Maxopp Investment Ltd. [ 2018 (3) TMI 805 - SUPREME COURT] settles the law that relevant expenditure in case of exempt income has to be apportioned between taxable and non-taxable income. The assessee s arguments therefore challenging application of rule 8D in principle in light of section 14A are rejected. As alternative plea in view in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f work in progress (WIP) of construction account the assessee has not taken all the expenditure having a direct bearing on the WIP to arrive at the value of WIP of Bungalows sold by the assessee to his clients. Out of the total direct expenses of Rs.10,72,396/-, the assessee has considered only Rs.5,75,860/- for working of the WIP. As no satisfactory explanation given by the assessee during the course of assessment proceedings the AO has considered the balance amount of direct expenses of Rs.4,96,536/- and amount of electric connection charges of Rs.1,07,559/- for working out WIP. The AO has recalculate the G.P. and made the addition of Rs.6,71,481/-. 4.4. During the course of appellate proceedings the appellant has contended that bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to Rs.6,04,095/-. The appellant has submitted that applying G.P @28.96% on the aggregate amount of Rs.6,04,095/- works out to Rs.1,74,945/- and not Rs.6,71,481/- as quantified by the A.O. The appellant has contended that this mistake have crept in because the AO has included G.P. of Rs.4,99,790/-, which is already reflected in profit and loss account while making the addition. The contention of the appellant is found correct as the AO has made double addition of G.P. of Rs.4,99,790/- which is clear from the assessment order itself. Therefore, the AO is directed to restrict the addition to Rs.1,74,945/-. Thus the ground of appeal is partly allowed. 3. Learned authorized representative vehemently contends during the course of hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Maxopp Investment Ltd. vs. CIT, [2018] 91 taxmann.com 154 (SC), settles the law that relevant expenditure in case of exempt income has to be apportioned between taxable and non-taxable income. The assessee s arguments therefore challenging application of rule 8D in principle in light of section 14A are rejected. Learned counsel thereafter raises alternative plea in view of the hon ble Delhi high court in the case of Joint Investments Pvt. Ltd vs. CIT that such disallowance cannot exceed the actual exempt income figure. Revenue fails to rebut this legal position. We therefore restrict the impugned disallowance to the extent of exempt income amount of Rs.63,889/- and delete the remaining disallowance component out of Rs.1,27,549/-. Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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