DCIT CEN CIR 1 (1)(4), MUMBAI vs. D.B. REALTY P.LTD, MUMBAI

Solitary issue urged in the appeal filed by the Revenue relates to disallowance made under section 14A of the Act. The Assessing Officer computed the disallowance in both the years u/r. 8D(2)(iii) of the I.T. Rules at 0.5% of average value of investment. The learned CIT(A) noticed that the assessee has made major portion of investments only in subsidiary companies, associates concerns and partnership firms, in which the assessee is a partner. Accordingly, the learned CIT(A) took the view that investments made by the assessee are in the form of strategic investments and accordingly directed the Assessing Officer to compute the disallowance at 5% of the fixed/semi variable expenditure incurred by the assessee.

At the time of hearing learned counsel submitted that the Assessing Officer had made identical disallowance in A.Y. 2009-10 also, which was reduced to 5% of the fixed/semi variable expenses by the order passed by the learned CIT(A). He submitted that the Revenue took the matter to the Tribunal and the Tribunal, vide its order dated 19.11.2014 passed in relating to A.Y. 2009-10, has confirmed the order passed by the learned CIT(A) and accordingly dismissed the appeal filed by the Revenue. Learned AR submitted that the learned CIT(A) has followed its own order passed in A.Y. 2009-10 in the years under consideration also.

Learned Departmental Representative did not controvert the factual aspects presented by learned AR.

In view of the above, consistent with the view taken by the coordinate Bench of the Tribunal in A.Y. 2009-10, we confirm the order passed by the learned CIT(A) in the years under consideration also.