Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 827 - AT - Income TaxDisallowance of expenditure on amount written off - Losses belong to JV / AOP or assessee - Held that:- The expenses, which stand now written off, i.e., on the JV or the project owner being no longer interested in executing the projects/s, was, firstly, only and on behalf of the JV or the AOP aforesaid. The assessee was merely financing the expenditure for the time being as a promoter of a member of the said AOP. The amount represented only a claim receivable; that received from JPPL being the extent to which the project development stood, under the circumstances, financed by it; the position of JPPL being para materia with that of the assessee. The loss under reference is therefore of the AOP, and not the assessee's loss; the balance loss being borne by JPPL, its JV partner or associate. These amounts, were the project/s to be set up, recorded in the books of the JV or the project owner as toward project cost - there is no reference to written off amounts nor any details thereof, either in the assessment order or in the impugned order. Even no submissions in this regard were made before A.O. or by before Tribunal. Under the circumstances, therefore, there is no basis to modify the findings in respect of this amount, which stands added back similarly - Decided against assessee. Disallowance of interest - CIT confirmed disallowance - Held that:- A bare reference to the balance-sheet, would show that the assessee-company is a profitable company - It is thus not understand as to how it could be said that the amount invested by the assessee in shares and securities, at the year-end, is out of borrowed funds, which, apart from secured loans, which are for fixed assets, are by way of unsecured loans - No case for disallowance, looking at the financials in any manner, is thus made out. The impugned disallowance is accordingly directed for deletion - Decided in favour of assessee. Disallowance under section 14A - Held that:- Rule 8D, though not mandatory for the current year, yet cannot be said to be unreasonable, so that the same can only be said to be form a reasonable basis for the disallowance u/s. 14A(1). Having said that, how the Revenue could invoke r. 8D(2)(ii), disallowing interest expenditure there-under; having already disallowed the entire interest u/s. 36(1)(iii). In fact, we have found the entire of it as allowable as a business expense u/s. 36(1)(iii), considering the sources and application of funds, so that no disallowance qua interest expenditure u/r. 8D(2(ii) would arise in the facts and circumstances of the case - Decided in favour of assessee.
|