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2014 (1) TMI 918 - AT - Income TaxDeletion made u/s 14A of the Act r.w Rule 8D of the Rules – Correctness of the claim – Held that:- 99% of the investment held by the assessee during the year, were made in the previous A.Ys. - In the A.Y. 2005-06, the assessee had invested 1.6 crores in mutual funds / shares. It had interest free funds of 4.1 crore in that year. Latter in the A.Y. 2006-07 the assessee invested 1.78 crore in mutual funds / shares and in that year it had interest free funds of 4.04 crore. The finding of the CIT (A) upheld that the borrowed funds had not been utilized for the purpose of making investment in shares/mutual funds - The factual finding of the CIT (A) that the assessee had interest free funds of Rs.25.13 crore at the end of the year, as against investment of 3.39 crore, is also not disputed by the DR - In fact the CIT (A) has considered the additional evidence filed by the assessee, by admitted the same and called for remand report from the AO and on consideration of this remand report has given these factual findings - The revenue has not disputed the admission of additional evidence – Relying upon Maxopp Investment Ltd. Vs. CIT [2011 (11) TMI 267 - Delhi High Court]. Disallowance of proportionate administrative expenses – Held that:- The assessee has demonstrated that there is no regular activity carried out by the assessee for making investment - When there is no activity of investment worth noting, no administrative expenditure can be apportioned – Relying upon CIT Vs. Hero Cycles [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT ] – relief granted to the assessee – decided against Revenue. Deletion of deduction claimed u/s 35D of the Act – Increase in share capital - Held that:- Similar claim was allowed by the AO in the A.Ys. 2005-06 & 2006-07 and on the principle of consistency the claim cannot be disallowed this year - Allowability of claim of amortization have to be considered in the first year of the claim – Relying upon Janak Dehydration Pvt. Ltd. Vs. ACIT [2010 (10) TMI 906 - ITAT AHMEDABAD] with regard to principle of consistency - Once a claim for amortization is examined in the initial year and allowed, it cannot be disallowed in this latter years of amortization – Decided against Revenue.
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