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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE & SHRI MANOJ KUMAR AGGARWAL, HONBLEShri Nimesh Vora & Shri Mohit Khandelwal Shri Maurya Pratap
O R D E R PER C.N. PRASAD (JM) 1. This appeal is filed by the revenue against the order of the Learned Commissioner of Income Tax (Appeals)-4, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 29.05.2018 for the A.Y. 2014-15.
The first issue in the appeal of the revenue is relating to deletion of disallowance of ₹.3,84,32,677/- made u/s. 14A r.w.r. 8D(2)(iii) of I.T. Rules while computing income under normal provisions of the Act.
(A.Y. 2014-15) M/s. TV18 Broadcast Limited 3. At the outset, Ld. Counsel for the assessee submitted that identical issue has been decided by the Tribunal in the case of M/s. Television Eighteen India Ltd., which was later merged with the assessee company i.e. TV18 Broadcast Limited. It is submitted that the Tribunal by order dated 19.06.2019 in ITA.No. 4545/DEL/2015 at Para 19 following the decision of the Special Bench in the case of ACIT v. Vireet Investments Private Limited [165 ITD 27] held that only those investments which yielded dividend income should be considered for disallowance under Rule 8D (2)(iii) of I.T. Rules.
Ld. DR supported the orders of the Authorities below.
On a perusal of the Ld. CIT(A) order, we observe that the Ld. CIT(A) directed the Assessing Officer to recompute the disallowance under clause (iii) of Rule 8D(2) of I.T. Rules by considering only those investments from which assessee has earned exempt income during the year against which the revenue is in appeal before us. We also observe that the Tribunal in the case of M/s. Television Eighteen India Ltd., while disposing off the appeal in ITA.No. 4545/DEL/2015 dated 19.06.2019 held as under: - “19. In respect of disallowance under Rule 8D(2)(iii) of I.T. Rules is concerned following the Special Bench decision in the case of Vireet Investment Pvt. Ltd., (supra), we hold that only those investments which yielded dividend income should be considered for disallowance under Rule 8D(2)(iii) of the I.T. Rules. Thus, we direct the Assessing Officer to recompute
(A.Y. 2014-15) M/s. TV18 Broadcast Limited the disallowance U/s. 14A r.w. Rule 8D of the Act in the light of our above observations.”
Issue being identical, respectfully following the said decision we uphold the direction given by the Ld.CIT(A) and reject the ground raised by the Revenue.
Coming to the last issue the revenue is challenging the order of the Ld. CIT(A) in holding that disallowance u/s 14A r.w.r Rule 8D should not be considered for the purposes of computing book profits u/s. 115JB of the Act.
We find that this issue is squarely covered by the decision of the Hon’ble Special Bench in the case of ACIT v. Vireet Investments Private Limited [165 ITD 27] wherein it was held that computation under clause (f) of explanation 1 to section 115JB of the Act is to be made without resorting to computation as contemplated u/s 14A r.w. Rule 8D of I.T. Rules. Thus, respectfully following the said decision, we uphold the order of the Ld. CIT(A) and reject the ground raised by the Revenue.
In the result appeal of the revenue is dismissed. Order pronounced in the open court on the 19th February, 2020