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2014 (4) TMI 1113 - AT - Income TaxDisallowance u/s 14A - Held that:- The Department has not brought out any evidence to prove that the assessee has engaged any specialized staff either for making the investments in shares and mutual funds or for looking after such activities of the assessee, or to prove that any expenditure has in fact been specifically incurred for making such investments or for carrying out such activities. In the circumstances, in view of the case laws relied upon by the assessee, noted above, which squarely applies to the facts of the case on hand, no disallowance in terms of S.14A is called for, merely based on the presumption that certain expenditure must have been incurred, by resorting to estimation of such expenditure. For bringing any interest expenditure claimed by the assessee under the ambit of Rule 8D(2)(ii) the Assessing Officer has to show that the said interest is not directly attributable to any particular income or receipt. We find that the assessee in this case, has substantial reserves, and therefore, we find merit in the contention of the assessee that the investments have been made from out of the interest-free funds available with it. Hence, no disallowance out of the interest expenditure is called for in terms of S.14A of the Act, by estimating such interest expenditure as attributable to the amounts of investment. In this view of the matter, we do not find any justification for the addition sustained by the CIT(A). We accordingly delete the addition of ₹ 1 lakh sustained by the CIT(A) - Decided in favour of assessee Disallowance of provision for contingencies (NPAs) u/s. 36(2)(viia) - AO made such disallowance, observing that such a provision made by the Assessing Officer is not an allowable deduction - Held that:- As already noted the CIT(A) has merely set aside the matter to the file of the Assessing Officer for verifying the contention of the assessee that the amount towards contingencies(NPA), figured only by way of below the line adjustments against the profit of the year determined, in the Profit & Loss Appropriation Account. Since the CIT(A) himself has deleted the addition, subject to verification of the claim of the assessee in that behalf, assessee cannot have any grievance against the order of the CIT(A) on this issue. In that view of the matter, we find no merit in the grievance of the assessee on this issue - Decided against assessee Addition on account of difference between the market value of investments as against the book value - Held that:- Going through the impugned orders of the Revenue authorities, we find that neither the Assessing Officer nor the CIT(A) have properly addressed to the issue in dispute by passing a speaking order. They have dealt with the issue in a vague and summary manner, and the contentions of the assessee, against the addition proposed have not been brought out, much else dealt with, by them in the impugned orders. We accordingly, set aside the impugned orders of the Revenue authorities and restore the matter to the file of the Assessing Officer with a direction to re-adjudicate the issue, duly considering the contentions of the assessee in the light of the case-law on the subject. The Assessing Officer is directed to re-decide this issue in accordance with law and after giving reasonable opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purposes
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