Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 132 - ITAT DELHIDisallowance u/s 14A read with Rule 8D - sufficiency of own funds - HELD THAT:- Since the assessee company has sufficient own interest free funds and had not borrowed the funds to make investment in shares to earn the dividend income, the provisions of Section 14A is not applicable and consequently, the addition made by the authorities below cannot be sustained in the eye of law. Further, when the A.O. is not accepting the contention of the assessee company that no expenditure is incurred in relation to earning exempt income, then the burden lies on the Revenue to prove that assessee company had incurred the expenditure to earn the dividend income. In the instant case, the A.O. made the impugned addition on conjectures and surmises and applied the provisions of Section 14A read with Rule 8D - We delete the addition made by the A.O. and partly sustained by the CIT(A) on account of disallowance made u/s 14A r.w.r 8D - Accordingly, the grounds of appeal raised by the assessee on this issue are allowed. ALP determined by the A.O.- Arm’s Length interest on loan @ 12.83% - HELD THAT:- We find that the assessee company had provided equity to AE, whereas, the TPO treated it as loan transaction and recommended the addition on account of the Arm’s Length interest on loan @ 12.83%. We find force in the arguments of Assessee that the TPO treated the equity fund to AE as a loan transaction. Respectfully following the decision of Coordinate Bench of the Tribunal in assessee’s own case for the preceding A.Y. 2013-14 [2020 (1) TMI 858 - ITAT DELHI] we delete the addition made by the A.O. on account of Arm’s Length interest on loan @ 12.83% and sustained by the CIT(A). Accordingly, the grounds of the assessee company on this issue are allowed.
|