ORDER

Per CHANDRA POOJARI, AM:

These appeals filed by the assessee as well as the Revenue are directed against the order passed by the CIT(A), Thrissur dated 21/02/2018 and pertain to the assessment year 2012-13.

2. The first ground in assessee’s appeal in ITA No. 215/Coch/2018 is with regard to disallowance of Rs.10,10,99,840/-.

3. The facts of the case are that the Assessing Officer disallowed an amount of Rs.10,10,99,840/- u/s. 14A r.w.r. 8D towards expenditure incurred in relation to income not includible in total income.

4. We have heard the rival submissions and perused the record. In our opinion, a similar issue came up for consideration before this Tribunal in assessee’s own case in ITA No.29/Coch/2017 dated 13/12/2017 wherein it was held as under:

4. We have heard the rival submissions and perused the material on record. We find, that this issue is covered against the assessee and in favour of the Revenue by the decision of the Hon’ble jurisdictional High Court, in assessee's own case in ITA 730 of 2009. The relevant para of the Hon'ble jurisdictional High Court reads as follow: -

"5. What we have slated above is only a reasonable suggestion for the Assessing Officer to adopt which arises only if assessee is not able to establish more accurately the interest spent on earning tax free income. We, therefore, leave this matter to be decided by the Assessing Officer with reference to the accounts of the assessee- Banks for each year. Since we find that the rationale adopted by the Assessing Officer to estimate the expenditure for the purpose of disallowance under Section 14A is not tenable, we feel the matter should be restored to the Assessing Officer for making disallowance under section 14A by reasonably estimating as nearly as possible the expenditure incurred for earning the tax free income. This should be done after giving opportunity to '.he asses see-banks to suggest their own formula with reference to accounts for the purpose of arriving at the actual amount or near actual amount The disallowance on estimated basis has to be done as above until Rule 80 was framed and thereafter it is for the Assessing Officer to make disallowance by following sub-section (2) of Section 14A and Rule 80 of the Income Tax rules.

6. So far as the disallowance of administrative expenditure is concerned, we feel considering the fact that there is no precise formula for proportionate disallowance, no disallowance is called for, for proportionate administrative cost attributable to earning of tax free income until Rule 80 came into force. We, therefore, dispose of the appeals by setting aside the orders of the Tribunal and that of the first appellate authority on this issue and remand all the assessments back to the Assessing Officer for reworking disallowance under section 14A in the case of each assessee for each assessment year. The proportionate disallowance under Section 14A should be limited to only interest liability and not overheads or administrative expenditure; which should be considered for disallowance under rule 80 from 2007-08 onwards."

5. From the above, in our opinion, it is very clear that the assessment for the assessment year 2010-2011 onwards, the disallowance u/s 14A should be made under Rule 8D by the A.O. In the impugned assessment year, i.e., 2009-2010, the CIT(A) has rightly upheld the order of the A.O. by following the judgment of the Hon’ble jurisdictional High Court, in assessee's own case. The learned Counsel for the assessee fairly conceded that this issue is covered against the assessee. Therefore, respectfully following the decision of the Hon'ble jurisdictional High Court, we uphold the order of the CIT(A). It is ordered accordingly.

4.1 In view of the above order of the Tribunal, we are inclined to reject this ground of appeal of the assessee.

5. The next common ground in assessee’s appeal in ITA No.215/Coch/2018 and Revenue’s appeal in ITA No. 219/Coch/2018 is with regard to disallowance of deduction of Rs.10,79,