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

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.

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)

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.

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