Case Law Details
Religare Securities Ltd. Vs DCIT (ITAT Delhi)
Conclusion: Only those investments which had yielded dividend income for computing the average value of investments would be considered for the purpose of computing the amount of disallowance u/s 14A.
Held: In the instant case, as far as assessee’s additional ground was concerned which challenged the disallowance made u/s 14A, it was seen that in Assessment Year 2008-09 on the issue of disallowance u/s 14A, the Co-ordinate Bench of the Tribunal had considered the issue of disallowance and remitted the issue back to the file of AO to work out of the disallowance by calculating average investments under Rule 8D(2)(ii)/(iii) by taking only those investments which had actually yielded dividend income during the relevant year and also directed that if the same exceeded the dividend income then to restrict the same to the extent of exempt income only. Similarly, in Assessment Year 2011-12 in ITA Nos. 230/Del/2017 and 574/Del/2017, vide order dated 31.07.2020, the issue of disallowance u/s 14A had again restored the issue to the file of the AO with the direction to ascertain the investment which had yielded dividend income and to consider only those investments for computing the average value of investments. Therefore, on identical facts and with consent of both the parties, it was appropriate to restore this issue also to the file of AO with a direction to include only those investments which had yielded dividend income for computing the average value of investments for the purpose of computing the amount of disallowance u/s 14A.
FULL TEXT OF THE ITAT JUDGEMENT
ITA No.6330/Del/2017 is the assesseee’s appeal preferred against order dated 28.07.2017 passed by the Learned Commissioner of Income Tax (Appeals)-38, New Delhi {CIT (A)} for Assessment Year 2013-14 whereas ITA No. 6434/Del/2017 is the Cross Appeal by the Department for the same year.
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