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TMI Blog2018 (3) TMI 2031X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, is engaged in the business of cultivation and manufacturer of tea. In the assessments made for assessment years 2013-14 & 2014-15, the Assessing Officer disallowed additional depreciation of 10% claimed u/s. 32(1)(iia) on the opening balance of the additions made to plant and machinery that was put to use for less than 180 days in assessment years 2012-13 & 2013-14, respectively. Further, the AO made disallowance u/s. 14A r.w.r. 8D in assessment years 2013-14 & 2014-15 respectively, in spite of the assessee made an estimated disallowance attributable for earning dividend income. Aggrieved, the assessee filed appeals before the CIT(A). The CIT(A) confirmed the disallowance made towards additional depreciation for both the ays. In respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), the AR submitted that the assessee already disallowed Rs. 43,464/- and Rs. 3,76,777/-, respectively, as expenditure incurred for earning dividend income in assessment years 2013-14 & 2014-15 respectively. The assessee makes investment in mutual funds out of surplus available from time to tie and had not incurred any expense other than the expenditure already disallowed. The AO/CIT(A) erred in including the non-current investment in partnership firm of Rs. 960.85 lakhs. While, considering the average value of investments in the formula under Rule 8D(iii), without considering the fact that no exempt income was earned by the assessee from such investments. Further, the AR submitted that this tribunal in the case of M/s. Computer Age Managem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal to ½ percentage of the average value of the investment the income from which does not or shall not form part of the total income. Thus, under sub-clause (iii) what is disallowed is ½ percentage of the numerator 8 in Rule 8D(2)(ii). Again this is to be calculated in the same line as mentioned earlier in respect of Numerator B in Rule 8D(2)(ii) of the Act. 8.1. Thus, not all investments become the subject matter of consideration when computing disallowance under section 14A read with rule 8D. The disallowance under section 14A read with rule 8D is to be in relation to the income which does not form part of the total income and this can be done only by taking into consideration the investment which has given rise to this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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