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Income Tax Appellate Tribunal, “A”, BENCH
Before: SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANESH, AM
आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-2, Mumbai in appeal No.CIT(A)-2/IT/10315/2016-17 dated 14/05/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 07/11/2016 by the ld. Asst. Commissioner of Income Tax – 1(1)(1), Mumbai (hereinafter referred to as ld. AO).
M/s. Alco Company Pvt. Ltd., 2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the disallowance made u/s.14A of the Act r.w.r.8D of the rules in the facts and circumstances of the case.
We have heard rival submissions and perused the materials available on record. We find that the assessee had earned exempt income in the sum of Rs.23,47,99,599/-. The assessee had made suo-moto disallowance u/s.14A of the Act in the sum of Rs.21,56,725/- which admittedly comprises of disallowance of direct expenses in the sum of Rs.5,22,401/- and remaining towards indirect expenses. The ld. AO however, proceeded to make disallowance under rule 8D(2) of the rules under first limb for Rs.5,22,401/- and under third limb for Rs.50,52,267/-. After reducing the disallowance already made by the assessee in the sum of Rs.21,56,725/-, the ld. AO made net disallowance of Rs.34,17,943/- u/s.14A of the Act in the assessment. Before us there is no dispute with regard to disallowance of direct expenses made in the sum of Rs.5,22,401/- by the ld. AO. The ld. AR placed on record the copy of this Tribunal’s order in its own case for A.Y.2010-11 dated 30/07/2018 wherein the issue was remanded to the file of the ld. AO to decide in the light of decision of Hon’ble Supreme Court in the case of Maxopp Investments reported in 402 ITR 640. But we find from the perusal of the assessment order that the ld. AO had duly considered the ultimate principles laid down by the Hon’ble Supreme Court in Maxopp Investments by properly excluding the investments made in foreign companies which would yield taxable income while considering the average value of investments for the purpose of disallowance under third limb of rule 8D(2) of the rules. We find that this working of the ld. AO has been upheld by the ld. CIT(A), which in our considered opinion, does not warrant any interference. Accordingly, the grounds raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on this 15/01/2020