,    ""  
      IN THE INCOME TAX APPELLATE TRIBUNAL "J" BENCH, MUMBAI

      BEFORE S/SHRI I.P. BANSAL, (JM) AND B.R.BASKARAN (AM)
  .. ,      .. ,     
                ./I.T.A. No.6963/Mum/2013
             (   / Assessment Year : 2010-11)

 M/s JSW Holdings Ltd.,          / Dy. Commissioner of Income
 (Formerly Jindal South West     Vs. Tax 5(2),
 Holdings Ltd.),                        Mumbai.
 Jindal Mansion,
 5A, Dr.G Deshmukh Marg,
 Mumbai-400026
       ( /Appellant)              ..    (    / Respondent)


          . /   . /PAN/GIR No. : AABCJ1531J



           /: Appellant by:             Shri Hiro Rao
               /Respondent by:          Shri Love Kumar


            / Date of Hearing                 :29.6.2015
            /Date of Pronouncement : 29.6.2015


                               / O R D E R

Per B.R.BASKARAN, Accountant Member:

      The assessee has filed this appeal challenging the order dated 10-
09-2013 passed by Ld CIT(A)-9, Mumbai for assessment year 2010-11
confirming the disallowance of Rs.89,49,612/- made by the assessing
officer u/s 14A of the Act over and above the amount disallowed by the
assessee.


2.    The Ld Counsel appearing for the assessee submitted that the
assessee is a holding company and it has invested only in its subsidiaries.
                                                               ITA No.6963/M/13
                                       2







Hence all the investments are strategic in nature.         The Ld Counsel
submitted that the assessee itself had disallowed a sum of Rs.35,37,388/-
u/s 14A of the Act against the dividend income of Rs.206.63 lakhs earned
by it.      However, the assessing officer enhanced the disallowance to
Rs.124.87 lakhs, being 0.5% of the average value of investments
computed as per Rule 8D(2)(iii) of the I.T Rules and accordingly
disallowed the difference amount of Rs.89,49,612/-.        The Ld Counsel
submitted that the Ld CIT(A) also confirmed the order of the assessing
officer.


3.       The Ld Counsel further submitted that the assessee, being a holding
company, has made only strategic investments in its subsidiaries and
hence there is no question of making any investment decision, which may
have involved huge administrative expenses. The Ld A.R further placed
reliance on following decisions rendered by the Tribunal and submitted
that in the following cases, the disallowance made u/s 14A of the Act has
been deleted, since the investments were found to be strategic
investments made in subsidiary companies or they were long term.
         (a) M/s JM Financial Ltd. Vs. Addl CIT (ITA No.4521/Mum/2012
              dt. 26.3.14)
         (b) Garware Wall Ropes Ltd Vs. Addl. CIT (2014)(65 SOT 86)(Mum)
         (c) M/s Smart Chip Ltd (ITA No.1923,5196,5367/Mum/2012
             dt.28.11.14.


The Ld A.R invited then our attention to the Balance sheet and submitted
that the opening balance of investment continues during the instant year
also.      Accordingly he submitted that there was no occasion for the
assessee to incur expenditure.         Accordingly he submitted that the
enhancement of disallowance made by the AO, which was confirmed by Ld
CIT(A), requires to be deleted.
                                                               ITA No.6963/M/13
                                     3


4.    On the contrary, the Ld D.R submitted that the assessee is raising
contention with regard to strategic investments for the first time before
the Tribunal and hence the said claim requires examination.


5.   We have heard rival contentions and perused the record. From the
perusal of the Balance Sheet pertaining to the year under consideration,
we notice that there are no investments made/sold during the instant year
and hence the opening balance of investments continues during the year
also. Further, the Ld A.R has put in new contentions that the investments
already made by the assessee are strategic investments made in
subsidiaries.   The Ld A.R also placed reliance on certain case law to
support his contentions that the disallowance u/s 14A need not be
computed in terms of Rule 8D in case of strategic investments.        On the
contrary, the Ld D.R has submitted that the contentions of the assessee
require examination, since it involves verification of facts relating to the
said contention.







6.     Having heard rival contentions, we are of the view that the claim of
the assessee with regard to strategic investments requires examination at
the end of the assessing officer, since the said claim has not been
examined by the tax authorities. Accordingly, we set aside the order of Ld
CIT(A) and restore the matter to the file of the assessing officer with the
direction to examine the claim of the assessee by duly considering various
case laws relied upon by the assessee and take appropriate decision in
accordance with the law.
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                                    4


7.    In the result, the appeal filed by the assessee is treated as allowed
for statistical purposes.

The above order was pronounced in the open court on 29th June, 2015.

             29th June, 2015    

        Sd                                      sd

(.. /I.P. BANSAL)                       (.. / B.R. BASKARAN)
      / Judicial Member                   /Accountant Member

  Mumbai: 29th June, 2015.


. ../ SRL , Sr. PS

        /Copy of the Order forwarded to :
1.  / The Appellant
2.      / The Respondent.
3.     () / The CIT(A)- concerned
4.      / CIT concerned
5.                ,     ,  /
     DR, ITAT, Mumbai concerned
       / Guard file.
6.

                                           / BY ORDER,
             True copy
                                           (Asstt. Registrar)
                                  ,  /ITAT, Mumbai