Full Text
$-15
* IN THE HIGH COURT OF
+ ITA 7t/2012
CI'T
Through:
DELHI AT NEW DELHI..... Appellant
Mr. Abhishek Maratha" Adv.
€
VETSUS
BAIU\4ALT INDIA PVT LID ..... Respondent
Through: Mr. S. Kumar, Advocate.
HON'BLE MR. JUSTICE R.V.EASWAR
09.05.20L2
Ilaving heard learned counsel for the parties, the following substantial question of law is fi'aned:-
"Whether Income fax Appcllate Tribunal r,vas right in holding that Rule 8D of the Income
'I-ax Rules, 1962 is not applicable and the CIT(A) was colrect in calculation of disallowance under
Scction I4A @ 0.05% of the average investment?"
ORDER
2. Thc assessee is a company and the assessment year involved is 2007- 08. Ihe assessee had earned tax free dividend of Rs. 5,90,08,347l-,'exempt under Section 10(34) of the Incomc Tax Act,
1961.
3. I'hc Assessing Offrcer disallowed an amount of Rs.23,29,2151uncler Itulc 8D of the Income'I'ax Rules, 1962 (for short, 'Rule'). page I of[2] I'A
1. a L',tA 71/2012 2012:DHC:9840-DB />- 4. The CIT(A) held that the Rule 8D was not applicable and worked out the disallowance at 0.05% of the averase investment i.e. I{s. 2,32,921/-. The aforesaid order has O""n "lonfirmed by the Tribunal in the impugned order dated I[1].3.2011.
4. Learned counsel for the parties agree that the matter has to be remanded to the Assessing Officer in view of the decision of this Court in the case of Maxopp Investm€nt Ltd. Vs. Commissioner of Income Zax dated 18.[1] 1.2011 in ITA No.687l2009.
5. The Assessing Officer will accordingly compute the disallor.vance under Section 14A. Rule 8D will not be applied. Direct or indirect expenscs incurred to eam the exempt income shall be computed/calculated.
6. The question of law is accordingly answered partly in favour of the Revenue. The appeal is accordingly disposed of. No costs.. (-1 ll (. - ' LL (- SANJIV KTIANNA, J l. ["],(..^--t' R.V.EASWAR, J MAY 09,2012 r{K. t a