M/S J V HOLDINGS PVT LTD,BANGALORE vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (OSD) WARD-4(1)(1), BANGALORE

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ITA 2780/BANG/2018Status: DisposedITAT Bangalore29 November 2019AY 2014-154 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that for computing disallowance under Section 14A read with Rule 8D(2)(iii), only investments that have actually yielded dividend income should be considered. The AO was directed to follow the Special Bench decision in ACIT Vs. Vireet Investment Pvt. Ltd.

What were the facts?

The assessee's appeal concerned the disallowance made by the Assessing Officer (AO) under Section 14A of the Income Tax Act. The AO had considered all investments for computing the disallowance under Rule 8D(2)(iii).

What were the issues?

Whether the disallowance under Section 14A read with Rule 8D(2)(iii) should be computed only on investments yielding dividend income.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “B’’ BENCH : BANGALORE

Before: SHRI B.R BASKARAN & SMT. BEENA PILLAI

For Appellant: Shri G Sitharaman, C.A
For Respondent: Smt. Renuga, J.C.I.T (DR)
Hearing: 27.11.2019Pronounced: 29.11.2019

O R D E R Per B.R Baskaran, Accountant Member :

The appeal filed by the assessee is directed against the order dated 21/8/2018 passed by lf CIT(A)-12, Bengaluru dated 21/8/2018 and it relates to asst. year 2014-15.

2.

The assessee is aggrieved by the decision of ld CIT(A) in confirming the disallowance made by the AO u/s 14 A of the Act.

3.

We heard the parties and perused the record. At the time of hearing the ld AR placed his reliance on the decision rendered by Special Bench of ITAT in the case of ACIT Vs. Vireet Investment Pvt. Ltd. (165 ITD 0027) and submitted that for the purpose of computing disallowance u/s 14A r.w.r 8D(2)(iii) of the Act, the investments which has actually yielded dividend income should be considered. The ld AR submitted that the AO has considered all the investments for computing the disallowance u/s Rule 8D(2)(iii) of the IT Rules. Accordingly he prayed that the AO may be directed to follow the decision rendered by the Special Bench in the case of Vireet Investment Pvt. Ltd. (Supra)

4.

We heard ld DR and perused the record. We find merit in the prayer of the assessee as the same is supported by the decision rendered by the Special Bench of ITAT in the case Vireet Investment Pvt. Ltd., (Supra). Accordingly we set aside the order passed by the ld CIT(A) and direct the AO to compute the disallowance under Rule 8D(2)(iii) by following the decision rendered by Special Bench referred above.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced in the Open Court on 29th November, 2019.

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