INVESTMENTOR SECURITIES LIMITED,AHMEDABAD vs. THE ACIT, CIRCLE-1(3), AHMEDABAD

There is no dispute that the assessee herein has earned exempt income amounting to Rs.83,613/- in the impugned assessment year. This made the Assessing Officer to invoke Rule 8D of the Income tax Rules to compute the impugned disallowance in assessment order dated 12.02.2015. The CIT(A) confirms the same in his lower appellate order mainly on the ground that the assessee had not been able to demonstrate to have invested in the above tax free investments from its interest free funds only. The same factual position continues herein as well. Learned Authorized Representative states very fairly that the impugned disallowance ought not to have exceeded the entire exempt income amount (supra) as per hon’ble Delhi high court’s judgment (2015) 372 ITR 694 (Del) Joint Investments Pvt. Ltd. vs. CIT . Mr. Kabra on the other hand strongly supports both the lower authorities’ action invoking the impugned disallowance. He however fails to rebut the above legal proposition as per hon’ble Delhi high court’s recent decision. We therefore partly accept assessee’s grievance to restrict the impugned disallowance from Rs.3,02,563/- to the extent of the above exempt income figure of Rs.83,613/-. Learned counsel representing assessee submits that the instant concession of challenging the quantum of impugned disallowance instead of its correctness on merits be not taken as precedent in any preceding or succeeding assessment year. We accept the same to make it

This assessee’s appeal is partly allowed.