AVANTI FEEDS LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), HYDERABAD

The assessee’s sole substantive grievance raised in the instant appeal challenges correctness of both the lower authorities’ action invoking Section 14A r.w. Rule 8D(2)(iii) disallowance of ½% as average value of investments; coming to Rs.14,44,473/- in the course of assessment dt.29-10-2010 as upheld in the CIT(A)’s lower appellate discussion.

Suffice to say, it emerges at the outset there is no dispute about the assessee to have derived its exempt income from dividends of Rs.4,28,402/-. The assessee’s only case before us in light of the tribunal’s co-ordinate bench(es) order(s) in AYs.2009-10 and 2010-11 is that the only exempt income yielding investments have to be considered whilst computing the impugned administrative expenditure disallowance.

Learned departmental representative fails to rebut the clinching fact that the impugned computation has not followed the foregoing computation. We thus quote hon’ble Kolkata high court’s decision PCIT Vs. R.E.I.Agro Ltd., G.A.No.3581 of 2013, of 2013 as well as the tribunal’s earlier orders (supra) and direct the Assessing Officer to restrict the impugned disallowance only to the extent of exempt income yielding investments in the relevant previous year. Necessary computation to follow as per law. Ordered accordingly.

This assessee’s appeal is accepted for statistical purposes in above terms.