TMI Blog2018 (3) TMI 2031X X X X Extracts X X X X X X X X Extracts X X X X ..... AI ] for assessment year 2012-13 we hold that the assessee was eligible for claiming the balance 10% depreciation in the impugned assessment orders. AO is directed to allow such claim. The assessee s plea that such disallowances are to be restricted to 40% in accordance with Rule 8 of the Income Tax Rules is also in accordance with provisions and accordingly, the AO is directed to restrict the disallowances to 40%. The assessee s appeal for these two years stands allowed. Disallowances u/s. 14A r.w.r 8D - expenditure incurred for earning dividend income - computation made under Rule 8D(2)(iii) - CIT(A) restricted the disallowances u/s. 14A r.w.r 8D to the extent of exempt income - HELD THAT:- We direct the Assessing Officer to re-compute th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 14A r.w.r 8D, the CIT(A) relying on the jurisdictional High Court decision in the case of Royola Corporation Pvt. Ltd., in ITA No. 908/2015 restricted the disallowances u/s. 14A r.w.r. 8D to the extent of dividend income earned. Aggrieved against these orders, the assessee filed these appeals. 3. In respect of the additional depreciation, the AR submitted that in its case, this tribunal in ITA No. 1114/Mds/2017 for assessment year 2012-13 dated 21.09.2017 allowed the appeal by applying the ratio of the jurisdictional High Court in the case of CIT vs T.P. Texitles Pvt. Ltd., [2017] 79 Taxmann.com 411. Further, it is submitted that the Assessing Officer has no considered the fact that the assessee is a manufacturer of tea and only 40% of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years 2006-07 to 2010-11 in ITA Nos. 1236 1240/Mds/2014 1259 to 1261/Mds/2014. Following the Kolkatta Bench tribunal decision in the case of REI Agro Limited vs DCIT [144 ITD 141] directed the AO to re-compute the disallowance under Rule 8D(2)(iii) by taking the amount equal to half percent of the average value of investment which is given rise to the income which does not form part of total income. Per contra, the DR relied on the orders of the CIT(A). 6. We heard the rival contentions. Since the CIT(A) applied the decision of this tribunal, supra, and restricted the disallowances u/s. 14A r.w.r 8D to the extent of exempt income, we do not find any reason to interfere with his orders. However, the assessee questions the computatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances, the computation of the disallowance under section 14A read with rule 8D(2)(iii) which is issue in the assessee's appeal is restored to the file of the Assessing Officer for re-computation in line with the direction given above. No disallowance under section 14A read with rule 80(2)(ii) and (ii) can be made in this case. 12. Following the said decision, we direct the Assessing Officer to recompute the disallowance under Rule 8D(2)(iii) by taking the amount equal to percentage of the average value of the investment which has given rise to the income which does not form part of total income. Accordingly, we direct the Assessing Officer to re-compute the disallowances under Rule 8D(2)(iii) by taking the amount equal to pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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