IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI RAJENDRA, HON BLE ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, HON BLE JUDICIAL MEMBER ITA No. 508/MUM/2015 (Asst. Year : 2011-12) DCIT-5(2)(1), Vs. M/s. India Nivesh Limited, Mumbai. 601/602 Sukhsagar, N.S. Patkar Marg, Girgaum Chowpatty, Mumbai 7. PAN : AABCI 6743 E (Appellant) (Respondent) Assessee by : Shri Ram Kumar Pugaliya CA Department By : Shri N. Sathya Moorthy - DR Date of hearing : 21/07/2016. Date of pronouncement : 19/10/2016. ORDER PER C.N. PRASAD, JUDICIAL MEMBER This appeal is filed by Revenue against order of ld.CIT(A)-9, Mumbai, dated 03/11/2014 for Assessment Year 2011-12. 2. only grievance of Revenue in its appeal is that ld.CIT(A) erred in deleting disallowance made under section 14A read with Rule 8D of IT Rules. 3. Brief facts of case are that Assessing Officer while completing assessment, computed disallowance under section 2 ITA No. 508/MUM/2015 14A read with Rule 8D of IT Rules at Rs. 1,33,45,224/- as against assessee s own disallowance of Rs. 1,34,090/-. Since assessee itself has disallowed Rs. 1,34,090/-, he restricted disallowance to Rs. 1,32,11,134/-. 4. On appeal, ld. CIT(A) following order of Tribunal in assessee s own case for Assessment Year 2009-10, directed Assessing Officer to re-work out disallowance after excluding old investments in subsidiary company as assessee does not incur any administrative expenses to hold such investments. 5. Departmental Representative placed reliance on order of Assessing Officer, whereas Authorized Representative of assessee strongly placed reliance on order of ld. CIT(A). 6. We have heard rival submissions and perused orders of authorities below. identical issue has arisen before Coordinate Bench of this Tribunal in assessee s own case for Assessment Year 2010-11 in ITA No. 6600/MUM/2014 dated 23/09/2016, wherein following its earlier order in ITA No. 3692/MUM/2012 dated 13/08/2014 for Assessment Year 2009-10, affirmed order of ld. CIT(A) in holding that while computing disallowance under Rule 8D, investments made in subsidiary company should be excluded from investment. Coordinate Bench held as under:- 4. We have heard arguments advanced by learned representative of parties and perused record. Before discussing matter of controversy further, it is necessary to advert finding of CIT(A) on this issue on record:- "5.2. only substantive issue in this appeal is against disallowance made by AO u/s.14A of I.T.Act. AO has worked out disallowance by applying Rule 80 of I.T.Act, 3 ITA No. 508/MUM/2015 whereas appellant has suo moto disallowed only Rs.1,37,867/-, which was 20% of dividend income earned by it. As regards applicability of Rule 8D is concerned, in principle, I agree with finding of AO because in view of decision of Hon'ble Bombay High Court In case of Godrej & Boyce Ltd., disallowance has to be worked out under Rule 80 from A.Y.2008-09 in cases like instant case, where due to common pool of funds and infrastructure, it is practically not possible to identify exact amount of expenditure directly attributable to earning of exempt income. However, I also agree to contention of appellant to extent that under almost identical circumstances, Hon 'ble ITAT Mumbai in case of appellant itself for A. Y .2009-10 has set aside issue of disallowance u/s.14A with specific observation that while calculating proper disallowance under Rule 8D, AO has to take into consideration finding of ITA T Mumbai in case of M/s. Garware Wall Ropes Ltd., wherein it was held that while working out disallowance under Rule 8D, investments made in subsidiary company has to be from investments, because appellant disallowance under Rule 8D by following above referred direction of Hon'ble ITAT for excluding investment in subsidiary company. To this extent, appeal is partly allowed." 5. On appraisal of order, it is apparent on record that matter of controversy has been decided on basis of assessee's own case for A.Y.2009-10 by relying upon case of ITAT Mumbai in case of M/s.Garware Wall Ropes Ltd on point of provision u/s.14A read with Rule 8D. Assessing Officer has been directed to re-assess expenditure incurred to earn exempt income by excluding investment made in subsidiary company. It has been specifically directed that all investments made in subsidiary company has to be excluded from investment because appellant did not incur any administrative expenditure to hold such investment. Moreover matter of controversy has been decided on basis of observation made in case of M/s. Garware Wall Ropes Ltd.(Supra). Nothing illegality and infirmity has been observed in finding of CIT(A) on record. CIT(A) has passed order judiciously and correctly which does not require to be interfere with at this appellate stage. 7. Respectfully following said decision, we hold that there is no infirmity in order passed by ld. CIT(A) in giving direction to Assessing Officer to exclude investments made in subsidiary companies while computing disallowance under section 14A read with Rule 8D of IT Rules. 4 ITA No. 508/MUM/2015 8. In result, appeal of Revenue stands dismissed. Order Pronounced in open Court on 19th October, 2016 Sd/- sd/- (RAJENDRA) (C.N. PRASAD) Accountant Member Judicial Member Dated : 19 t h Oct., 2016. vr/- Copy to: 1. Assessee. 2. Revenue. 3. CIT 4. CIT(A) 5. D.R. 6. Guard file. By order //True Copy// Assistant Registrar I.T.A.T., Mumbai DCIT-5(2)(1), Mumbai v. M/s. India Nivesh Limited