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2022 (12) TMI 786 - ITAT CHANDIGARHRevision u/s 263 - disallowances u/s 14A - interest bearing borrowed funds have been utilized during the year to fund the non-current investments as evident from the steep increase in the finance cost during the year which doesn't stand justified with reference to revenue from operations and it is accordingly held that the finance cost is incurred during the year to sustain its non-current investments which call for disallowance u/s. 14A of the Act and which the AO has failed to enquire during the course of assessment proceedings - HELD THAT:- As submitted that basis the said submission that there are no fresh investments made during the year and consequentially, no interest bearing funds were utilized for making any such investment, no disallowance was made by the AO towards the interest expenditure incurred during the year. We find force in the arguments of the AR and are of the considered view that the matter has been adequately examined by the AO regarding fresh investments made during the year and after taking into consideration the factual position and submissions of the assessee including the comparative position of investments at the beginning and at the end of year which shows that there are no fresh investments made during the year, the AO has not made any disallowance towards interest expenditure u/s. 14A - we find that it is not the case of the ld. PCIT that the investments made in the earlier years were made out of interest bearing funds and interest cost thereof continue to be claimed during the year and which has escaped attention of the AO. Nothing has been brought on record to this effect either in the impugned order or during the course of hearing before us including any disallowances made u/s 14A in the earlier years. We find that there are justifiable basis to invoke the provisions of section 263 as the order passed by the AO cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue and the order so passed by the ld. PCIT is hereby set-aside and that of the AO is sustained.
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